Boeing is poised to initiate a significant round of layoffs, affecting approximately 10% of its workforce, translating to around 17,000 employees. The news follows a turbulent period for the aerospace giant, marked by financial setbacks and a recent strike.
The announcement was made by Boeing CEO Kelly Ortberg last month, who highlighted the need to navigate a challenging environment and undertake structural changes to ensure the company’s long-term competitiveness. Ortberg emphasized the necessity of streamlining operations to address a series of failures in recent years, including catastrophic incidents that resulted in the loss of hundreds of lives. These incidents, coupled with a 50-day strike by 33,000 Boeing employees, have significantly impacted the company’s finances.
Despite running into losses, Boeing has maintained a larger workforce than it had at its peak production level before the COVID-19 pandemic. As per Bloomberg, the company started this year with 171,000 employees, representing a 12% increase compared to its pre-pandemic peak of 153,000 employees.
During an earnings call on October 23rd, Ortberg asserted the need to reset priorities and create a leaner, more focused organization. He further elaborated that the cuts are aimed at consolidating areas of inefficiency and reducing non-essential activities.
The lay-offs come at a critical juncture for Boeing, following the recent 50-day strike, which led to production delays for its 737 MAX, 767, and 777 aircraft. Although Ortberg did not disclose specific details about the affected roles, he confirmed that the cuts will encompass executives, managers, and employees across various levels.
The upcoming layoffs mark a significant shift for Boeing, signaling its commitment to restructuring and cost-cutting in the face of challenging market conditions and past setbacks. The extent of the impact on the company’s future operations and the broader aerospace industry remains to be seen.
