Boeing is moving ahead with its plan to reduce its global workforce by 10%, as part of broader efforts to regain financial stability. This decision follows a period of significant disruptions, including a machinists’ strike that recently ended, and reflects Boeing’s ongoing struggle to address mounting financial challenges.
Layoffs Impact Non-Essential Roles
The aerospace giant, which employs tens of thousands worldwide, will be issuing 60-day layoff notices to employees across its global workforce. The Society of Professional Engineering Employees in Aerospace (SPEEA), which represents Boeing’s engineers, confirmed that its members will be affected by these reductions. However, the International Association of Machinists and Aerospace Workers (IAMAW), representing the machinists, has not shared specific details about potential job cuts within their ranks.
Boeing CEO Kelly Ortberg outlined the company’s approach during a recent earnings call, stating that the layoffs will primarily target non-production roles. The company’s goal is to streamline operations by cutting overhead and consolidating positions, rather than reducing staff directly involved in aircraft development and assembly. Ortberg emphasized that these efforts are aimed at making Boeing more efficient without impacting critical functions.
Financial Strain Reflected in Delivery Shortfalls
Boeing’s financial troubles are underscored by a significant drop in aircraft deliveries. In October, the company delivered only 14 commercial planes, a sharp decline from 34 delivered in the same month the previous year. This marks the lowest number of deliveries since November 2020, a period already marked by production challenges. The decline is partly attributed to the impact of the machinists’ strike and ongoing supply chain issues.
Despite the return of workers, Boeing’s financial outlook remains grim, with the company still recovering from a $6 billion loss last quarter. The company has pledged to continue efforts to safeguard its future by cutting costs and reevaluating its priorities. In this challenging environment, Boeing has focused on reducing unnecessary spending and working closely with suppliers to manage costs more effectively.
Layoffs Extend Beyond Production Teams
Internally, Boeing is reorganizing its operations, with some departments expected to see reductions of up to 30%. These cuts will mainly affect teams in administrative and support roles, not those working directly on aircraft production. While the company is minimizing layoffs in production departments, some engineering teams, particularly those involved in military aircraft programs, are expected to face cuts as well. Military engineering projects, such as those supporting the F-15, F/A-18, and the P-8 submarine hunter, are among the areas where job losses are anticipated.
Slow Recovery and Production Challenges
Despite aggressive hiring in recent years to prepare for higher production rates, Boeing is struggling to ramp up production. The company had planned to significantly increase its 737 Max output but has been held back by supply chain bottlenecks and delays in meeting FAA safety protocols following a serious incident earlier this year. As a result, production goals for the 737 Max have been delayed, with expectations now pushing delivery goals into the second half of 2025.
Even with the machinists’ strike behind them, Boeing faces the complex challenge of resuming full production. The company’s supply chain has not yet recovered fully, making it difficult for Boeing to reach its desired output levels. Additionally, many new hires, brought on in anticipation of ramped-up production, will need retraining before they can contribute effectively to operations.
In the face of these challenges, Boeing’s leadership is emphasizing financial caution. CEO Kelly Ortberg has underscored the importance of aligning the company’s workforce and operational priorities with its current financial position. The company’s focus is on reducing unnecessary expenditures while maintaining high standards for safety and quality.
