At the end of last month, on the same day that Boeing touted plans to hire 10,000 people this year, senior leadership convened virtual meetings internally to break bad news to nonunion staff in human resources and finance.
Despite the growth elsewhere, those corporate positions will be slashed through substantial job cuts and layoffs.
“We expect about 2,000 reductions this year primarily in Finance and HR through a combination of attrition and layoffs,” Boeing confirmed Monday.
Boeing is outsourcing about a third of those jobs to Tata Consulting Services in Bengaluru, India.
The rest will disappear as Boeing reduces its finance and HR support services, said Mike Friedman, a senior director of communications at Boeing.
“Over time, some of our corporate functions have grown quite large. And with that growth tends to come bureaucracy or disparate systems that are inefficient,” Friedman said. “So we’re streamlining.”
Even with the 2,000 white-collar job cuts, plus attrition as employees retire throughout the company, Friedman said the push to hire production workers and engineers will ensure that overall Boeing will “significantly grow” this year, particularly in the Puget Sound region.
Boeing declined to say how many Seattle-area positions will be impacted by the cuts.
With ramping up jet deliveries the top priority, he said Boeing Chief Financial Officer Brian West is “working to focus our resources and hiring in the factories, in manufacturing and engineering.”
About 1,500 jobs will be cut in finance, about a quarter of the roughly 5,800 total companywide, and up to 400 more in HR, about 15% of the total there.
Staff in those organizations, many of them longtime employees, are shellshocked by the news that their jobs may be gone later this year.
One senior finance leader, whose job is secure from layoff but who spoke on condition of anonymity out of concern he would be fired for speaking to the press without authorization, said he worries that, with all the layoffs at Big Tech companies, many of these white-collar workers may struggle to find new work.
“The realization is hitting a lot of people that they are not going to have jobs,” he said.
Separately, in a blow to white-collar staff in all roles across the company, Boeing has begun requiring managers preparing employee annual performance reviews for 2022 to classify 10% of their staff as failing to meet all expectations.
“This year, we’re adhering to those guidelines … pretty rigorously,” said Boeing’s Friedman.
A senior manager in Boeing’s IT organization, who also spoke on condition of anonymity to protect his job, said it’s the first time in two decades he’s seen what was previously a soft guideline strictly enforced.
He said nonunion white-collar staff downgraded by the forced ranking will get significantly lower annual bonuses this month and reduced raises.
“We all had to revise our honest scores and make several downgrades,” the IT manager said. “To me, it’s unethical and it’s really got a lot of managers concerned.”
Complex work
The work at Boeing Finance is much more than just bookkeeping.
For example, the commercial airplanes division must conduct sophisticated financial planning before any production to provide cost estimates, allocate resources, calculate overhead rates and provide metrics to program managers.
And when airplane production is underway, finance staff must gather complex cost and revenue data to determine profitability and accurately close the accounting books every quarter.
Much of the accounting is arcane and some of it peculiar to Boeing, which in the past routinely used tricky financial engineering to make sure it met quarterly cash-flow projections.
Another challenge, the senior finance leader said, is that through numerous acquisitions across the world, Boeing has accumulated diverse accounting systems at separate units over time that “all have to be kludged together into the Boeing accounting system.”
The plan to cut 1,500 finance jobs follows a much smaller initial job cut in that organization announced last fall.
Source: The Seattle Times