The Seattle Times has reported that Boeing Co BA 0.69% is expected to lay off 4,000 employees by June. According to Deutsche Bank analyst Myles Walton, that could be good news for shareholders.

Walton looked back at the last 18 years since the McDonnell Douglas merger at the correlation between Boeing’s workforce size and its share price. He found that Boeing’s share price lagged the market in five of the nine years that the company expanded its number of employees. However, eight out of the nine years Boeing cut jobs, its share price beat the market.

Walton believes that the layoffs were triggered by competitive pricing pressures and the desire for the company to improve margins.

“A 10 percent margin for BCA in’17 alongside the effects share repo would yield a mid-teens EPS growth before considering the likely 4 percent additional top-line growth in’17 vs. ’16,” Walton explained.

Boeing’s website indicates…

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