SEATTLE – The Boeing Company has announced its latest round of layoffs, handing termination notices to 438 employees in the process. The concerned personnel were notified of the company’s decision last week and it is expected for them to remain on Boeing’s payroll until mid-January.
The redundancies are made following CEO Kelly Ortberg’s intimation in October this year that there were plans to sideline 10% of the company’s total workforce or up to 17,000 employees. The newly appointed chief mentioned in his memo that Boeing will need to “reset its workforce levels to align with our financial reality.”
What has resulted in the Boeing layoffs?
The 438 employees terminated in recent days constitute just 2.5% of Boeing’s planned layoffs. The aerospace giant has been in a precarious financial position for the majority of the year. 2024 did not start on an auspicious note as an Alaska Airlines (AS) 737 MAX had a panel blown off its fuselage mid-air, which also led to regulatory trouble for the airline.
The Federal Aviation Administrator’s (FAA) intervention led to production of the aircraft being capped at 38 units per month, though that remains a target Boeing has yet to meet.
Boeing’s finances were further weakened by a strike by its machinists’ union but Ortberg turned down claims of the layoff being a result of the workforce’s absence. The machinists’ strike has ended since earlier this month.
Layoffs made over various departments
Boeing’s layoffs have been made across a number of different departments. 218 members were part of the Society of Professional Engineering Employees in Aerospace (SPEEA). They mainly comprised engineers and scientists.
The remaining 220 employees were analysts, planners, skilled tradesmen, and technicians.
The eligible employees will receive one week of severance pay for every year of being employed by Boeing, career transition services, and subsidized healthcare for up to three months.
Repay Strike Workers
Boeing has committed to fully reimbursing workers for wages lost during the recent 53-day strike by factory employees. The strike, involving thousands of production workers, significantly disrupted the company’s operations, halting production lines and delaying critical projects.
The repayment decision applies to staff who were left unpaid during the work stoppage. CEO Kelly Ortberg confirmed that thousands of salaried workers on furlough during the strike, which halted 737 MAX production, would receive full compensation for the period. The strike began in September after 33,000 union machinists walked off the job, demanding improved wages and benefits.
The International Association of Machinists (IAM) District 751 union ratified a new compensation package with 59% member approval. The agreement includes a 38% pay increase over four years, a $12,000 ratification bonus, and a $5,000 contribution to workers’ 401k plans. These terms aim to address longstanding disputes between workers and management while ensuring stability for the workforce.
Despite agreeing to the compensation package, Boeing continues with its planned workforce reduction. The company has confirmed a cut of 17,000 positions, representing 10% of its global workforce, as part of a broader restructuring strategy. The move reflects ongoing efforts to align operations with long-term financial and production goals.
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