Boeing has announced it will repay employees who were furloughed during a recent seven-week strike but will still proceed with plans to cut about 10 percent of its global workforce.
In an email to staff on Thursday, CEO Kelly Ortberg shared the decision to compensate for lost wages while also reaffirming the company’s commitment to its previously outlined job reduction strategy.
Strikes and Furloughs: What Led to the Decision?
In September, 33,000 union machinists went on strike, disrupting the production of Boeing’s popular 737 MAX aircraft.
This led to the temporary furlough of thousands of salaried employees.
Initially, Boeing placed these employees on unpaid leave. However, after revising its plans, the company decided to cancel the unpaid furloughs and repay affected staff.
Ortberg addressed the employees in an internal memo, stating:
“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.”
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Job Cuts to Continue Despite Compensation
Despite this gesture, Boeing remains steadfast in its plan to cut approximately 17,000 jobs, part of a broader effort to reduce its global workforce by 10 percent.
Employees are expected to receive notices about the future of their roles this month, which could deepen concerns about job security and morale.
Ortberg emphasized the importance of the cuts, writing:
“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. These structural changes are important to our competitiveness and will help us deliver more value to our customers over the long term.”
Union Agreement Brings Striking Workers Back
Boeing recently secured ratification of a new contract with its machinists, ending the lengthy strike.
The deal includes a 38 percent pay increase over four years and a $12,000 bonus, bringing workers back by November 12.
However, Boeing has yet to announce when it will resume full production of the 737 MAX, indicating the restart will be gradual and subject to regulatory oversight.
A spokesperson for the Society of Professional Engineering Employees in Aerospace (SPEEA), which represents Boeing engineers, confirmed that 60-day job loss notices would be issued to its members on November 15.
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Financial Struggles and Strategic Restructuring
Boeing’s decision to proceed with job cuts comes amid significant financial challenges.
The company reported losses of nearly $8 billion this year, exacerbated by ongoing quality issues, including a mid-air panel blowout in January.
In response, Boeing raised $24 billion in fresh capital last month to bolster its financial stability.
Ortberg acknowledged the tough road ahead, writing:
“We have hard work ahead to restore our company and deliver on our customer commitments, but we are on the right path and making the right changes.”
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Asset Sales on the Horizon?
The CEO hinted at potential asset sales as Boeing reviews its business operations and long-term forecasts.
Downsizing efforts appear focused on streamlining Boeing’s core businesses, particularly its civil plane making and defense units.
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What’s Next for Boeing’s Workforce?
While Boeing’s decision to repay furloughed staff may offer some relief, the company’s aggressive push towards job cuts signals a challenging period ahead.
With employees facing uncertainty and production timelines still unclear, Boeing’s next steps will be critical in determining its recovery path.
As the company grapples with internal restructuring and external market pressures, key questions remain:
- How will Boeing manage morale and retain talent amid widespread layoffs?
- When will production of the 737 MAX resume, and how will regulatory reviews impact the timeline?
- Could asset sales help stabilize Boeing’s finances, or will they lead to further operational challenges?
The coming months will be pivotal for Boeing as it aims to rebuild trust with its workforce and restore its position in the aerospace industry.
