Boeing Announces Major Workforce Cuts Amid Structural Changes
Boeing has begun a significant round of workforce reductions, issuing termination notices to over 400 employees as part of a broader plan to slash its workforce by 10%, or approximately 17,000 jobs. The company has informed 438 members of the Society of Professional Engineering Employees in Aerospace (SPEEA) that their services are no longer required, with the layoffs officially announced on November 1, 2024.
This move comes as Boeing faces ongoing challenges and continues its efforts to restructure amid difficult economic conditions. In a statement, Boeing CEO Kelly Ortberg explained that structural changes within the company were necessary, requiring “tough decisions” to be made. He acknowledged the impact these layoffs would have on employees and their families, stating, “We know these decisions will cause difficulty for you, your families and our team, and I sincerely wish we could avoid taking them. However, the state of our business and our future recovery require tough actions.”
According to reports by The Seattle Times, the 438 employees laid off included 218 engineers from Boeing’s professional segment and 220 technicians from its technical membership group. Laid-off staff will continue to receive pay until mid-January 2025, with health care benefits provided for up to three months.
This round of layoffs follows a seven-week strike that ended in November 2024. The strike saw 58% of union members voting to approve a new pay deal that includes a 38% pay rise over four years, a $12,000 ratification bonus, and an additional $5,000 payment, which can be paid directly to workers or towards their 401K retirement fund.
Boeing’s decision to reduce its workforce comes as the company grapples with challenges in the wake of a January 2024 incident involving an Alaska Airlines 737-9. During the flight, a door plug separated from the aircraft shortly after takeoff, raising serious concerns about Boeing’s safety and quality procedures. This incident has led to further scrutiny of the company’s manufacturing processes.
In response to its financial pressures, Boeing raised $21 billion in a public stock offering in October 2024, which it plans to use for debt repayment, working capital improvements, and investments in its subsidiaries. The company is taking these measures in an attempt to stabilize its finances and position itself for future recovery. However, the workforce reductions and restructuring efforts indicate that Boeing is focused on streamlining its operations and reducing costs in the face of ongoing challenges.
As Boeing moves forward with these drastic changes, the company will continue to navigate a complex environment marked by financial pressure, safety concerns, and efforts to remain competitive in the aerospace sector.
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