Boeing has announced that it will compensate employees who were furloughed during a recent seven-week strike by factory workers, while also confirming its intention to move forward with significant job cuts. This decision comes after a period of intense labor negotiations where the International Association of Machinists and Aerospace Workers (IAM) District 751, representing more than 33,000 workers, went on strike in September, causing the suspension of production for Boeing's flagship 737 MAX aircraft.
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Kelly Ortberg, CEO of Boeing, acknowledged the sacrifices made by the furloughed employees, stating in an internal email, "Your sacrifice made a difference and helped the company bridge to this moment. We want to acknowledge your support by returning your lost pay if you went on unpaid furlough." This move to repay lost wages is aimed at alleviating some of the financial strain on workers who supported the company during the production halt. However, despite this conciliatory gesture towards the furloughed staff, Boeing remains committed to its previously announced strategy of downsizing its global workforce by about 10%, which equates to approximately 17,000 positions. Ortberg has emphasized that these structural changes are crucial for aligning the company's workforce with its current financial situation and strategic priorities. "We will continue forward with our previously announced actions to reduce our workforce levels to align with our financial reality and a more focused and streamlined set of priorities," he communicated to the staff.
The company's decision to cut jobs is part of a broader effort to enhance competitiveness and improve long-term value delivery to its customers. Boeing has been facing multiple challenges including production setbacks, quality issues, and financial pressures, intensified by a mid-air panel blowout incident in January. These layoffs are expected to affect employees across various levels and roles, with notifications set to start around mid-November. This strategic move comes at a time when Boeing is also looking to raise capital, having secured $24 billion last month to bolster its financial position.
Ortberg has mentioned that the company is in the process of reviewing its businesses for potential asset sales to further streamline operations and focus on key areas like civil placemaker and core defense units. While the repayment of lost wages might offer immediate financial relief to affected employees, the looming job cuts introduce a period of uncertainty for Boeing's workforce, reflecting the delicate balance between maintaining employee morale and ensuring the company's operational and financial health.