Boeing is set to lay off over 2,500 employees across the U.S. states of Washington, Oregon, South Carolina, and Missouri, as indicated by federally mandated filings released on Monday and confirmed by a union representative. Approximately 2,200 of these layoff notices were issued in Washington, while another 220 were sent to employees in South Carolina, where the company manufactures commercial aircraft, including the 777X jetliner, a key focus for Boeing. This decision aligns with the debt-laden aerospace giant’s broader plan to reduce its global workforce by 17,000 jobs, or about 10%.
In a memo to employees, Boeing CEO Kelly Ortberg said the company needs to focus on customers and its core businesses to regain financial footing. The company has racked up billions of dollars in losses and accumulated debt as it struggles to revive production rates after an eight-week machinist strike last year halted output of its best-selling jetliner, the 737 MAX.
The new round of layoffs does not affect members of the machinists union that returned to work this month. Instead, the company has started slashing staff in the Society of Professional Engineering Employees in Aerospace, or SPEEA, representing engineers and other technical workers. A company representative told the Seattle Times last week that 438 of the union’s 17,000 members in Washington state received layoff notices.
SPEEA’s staff is located mainly in engineering offices rather than at production facilities, and the layoffs have not affected the company’s ability to restart production of the 737 MAX. But the workers will remain on the company payroll through mid-January to comply with federal requirements that Boeing must give employees 60 days’ notice of any layoffs.
The Seattle Times reported that many of those who will be let go will receive career-transition services and subsidized health care benefits for three weeks, along with one week’s pay for every year they worked at the company. The company is also mulling a second round of layoffs, if necessary, but the details are not yet finalized.
The latest cuts are the second round of layoffs since Boeing announced in October it would cut 10,000 jobs or about 10% of its global workforce. The company has been struggling to re-energize production and sales of the 737 MAX after a weeks-long strike by 33,000 West Coast Boeing workers stalled the assembly line.
The company has been facing a tough market as it competes with rival planemaker Airbus, which is gaining a share in the lucrative market for long-haul jets. Boeing’s share of the jetliner market is down 4% this year. Amid the challenges, it has taken steps to improve quality and efficiency, such as limiting employee overtime at its Washington plants. The company has also tried to lower production costs and reduce the time it takes to deliver its aircraft. The 777X is due to start flying in 2022, although that date has been delayed by several months. The company has a backlog of more than 5,400 planes, but the pace of deliveries has been slow to pick up.
