Thousands of Boeing employees are about to learn if they’re included in the company’s latest round of layoffs. The aerospace giant announced it will issue layoff notices on Wednesday to employees impacted by a planned workforce reduction of approximately 17,000 positions. This measure is intended to help Boeing regain its competitive edge as it navigates multiple challenges, including decreased output following a near-catastrophic accident involving a 737 Max plane and a seven-week strike that halted production at its Puget Sound facilities.
The layoffs, which affect both union and nonunion workers, come months after the company’s profits took a hit from huge losses in its defense business and a costly decision to delay the launch of a new long-range jet, the 777X. The move also reflects a new CEO’s drive to reduce bloat and inefficiency at the company and is part of an effort to regain the trust of shareholders.
In his first letter to staff since becoming chief executive officer, Kelly Ortberg said the cuts were a “first step” to reset operations to align with the company’s financial realities. The company has already made significant changes to its production schedule, delaying the rollout of the 777X to 2026 and ending production of its 767 freighter jets in 2027 after finishing current orders.
But the company’s troubles are far from over. It struggles with a loss of customer confidence following two fatal crashes on its best-selling plane and a global grounding that cost Boeing billions in lost sales. It also faces increased regulatory scrutiny after a January disaster that left one of its 737 Max planes with a panel that blew out minutes into an Alaska Airlines flight, reigniting safety concerns from regulators and customers.
Boeing is trying to get back on track and has begun cranking up production of its 737 planes faster than analysts had expected. However, the company still has a lot of work to do to rebuild its reputation and stamp out quality problems on aircraft and other products that led to the recent disaster.
It’s unclear how the company will manage to do that. In addition to the planned cuts, it’s considering selling off other assets, such as Jeppesen, which makes maps and navigation systems for airlines and car companies. The company would use the proceeds to trim its towering debt, which has topped $50 billion.
However, workers are skeptical that the company can make good on its promises to refocus the company and restore its competitive edge. They have already felt burnt by a series of missteps, including the slow pace of pay raises that accompanied the Machinists’ strike, which ended last month. And many believe the company is not listening to their concerns. They say they are frustrated with management attitudes toward their safety and quality concerns, mainly when those concerns are reflected in decisions such as the decision to cancel the 777X and the end of the 767 cargo jet.
