Boeing announced several workforce reductions this week as the company faces a “difficult” strike by its workers.
On Monday, Boeing Chief Financial Officer Brian West sent a memo to employees saying the company would make 10 immediate workforce reductions. In the memo, some of the cuts included a hiring freeze at all levels, stopping pay raises for promotions and restricting all nonessential travel, the Associated Press reported.
“We are also considering the difficult step of temporarily furloughing many employees, executives and managers in the coming weeks,” West said in the note.
The memo also noted that the cuts, which included lower supplier spending, were necessary because the company was “in difficult times” due to a recent strike by plant workers.
“This strike puts our economic recovery at significant risk,” West added.
About 33,000 workers, represented by the International Association of Machinists and Aerospace Workers, went on strike early Friday after rejecting an offer that included a 25 percent pay increase over four years.
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Last week, Brian Bryant, international president of the International Association of Machinists and Aerospace Workers (IAM), issued a statement on the strike: “Our members’ rejection of the Boeing contract was a resounding victory for the entire aviation industry and for workers’ rights. Boeing must now offer them a contract that respects their value and gives them the dignity they deserve.”
“The IAM stands firmly behind our members. Together, we will fight until Boeing delivers a deal that our members will accept. Our strength is in our unity, and we will not back down until they receive the compensation they deserve,” Bryant added.
Since the start of 2019, Boeing has lost more than $25 billion, including $4.3 billion in the second quarter of 2024 alone, as the company braces for another year of financial losses.
Stephanie Pope, head of Boeing’s commercial airplanes division, noted that the company has $60 billion in total debt and urged workers to accept last week’s contract offer. She described it as the best deal Boeing has ever offered, endorsed by the local union president and negotiators.
Workers who spoke out before and after Thursday’s strike vote expressed their demand for total raises of at least 40 percent and the restoration of bonuses that Boeing plans to cut.
Additional cost-cutting measures outlined in the CFO’s memo include eliminating first and business class travel for those who still need to travel and stopping spending on external consultants.
West said Boeing plans to make “significant reductions in supplier spending” and will halt most supplier purchase orders for the 737, 767 and 777 models.
This article includes reporting from The Associated Press.
