Boeing announces plans to reduce its workforce by 10 percent
Date
10/16/2024 5:42:23 AM
(MENAFN) Boeing, the prominent US aerospace manufacturer, has announced plans to reduce its workforce by approximately 10 percent, equating to around 17,000 employees, as the company grapples with mounting financial losses and production disruptions caused by a recent strike. This announcement comes in the wake of significant challenges facing the company, which employs nearly 170,000 people globally.
In a memo circulated to staff on Friday, Kelly Ortberg, Boeing's new president and CEO, outlined the job cuts, which will affect both executives and regular employees. Ortberg, who stepped into the CEO role just two months ago, acknowledged the tough position the company finds itself in. “Our business is in a difficult position, and it is hard to overstate the challenges we face together,” he stated. The announcement follows a month after 33,000 hourly workers initiated a strike, further complicating the company's operational capacity.
The decision to reduce the workforce aims to align Boeing's staffing levels with its current financial realities and to streamline its focus on essential priorities. Ortberg emphasized the necessity of these "tough" choices in completing structural changes that will ensure the company remains competitive and capable of fulfilling customer orders over the long term.
In addition to the layoffs, Ortberg revealed that Boeing is postponing the development of its 777X aircraft program until 2026 and plans to cease production of its commercial 767 freighters by 2027, once existing orders are fulfilled.
Earlier this week, Boeing also filed an unfair labor practice charge with the National Labor Relations Board against the union representing its striking workers in the West Coast factories. The company accused the International Association of Machinists and Aerospace Workers of failing to engage in good faith bargaining during the four-week strike and claimed that the union was disseminating misinformation to its members regarding the negotiations.
As Boeing navigates this difficult period, the upcoming job cuts and production adjustments underscore the significant challenges the company faces in a competitive and volatile aerospace market. The actions taken now are critical for Boeing's future stability and operational success as it strives to recover from its current crisis.
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