Boeing layoffs weren't just a strike threat

Melvin Backman
·2-min read
The Boeing logo - Photo: Jason Redmond/AFP (Getty Images)
The Boeing logo - Photo: Jason Redmond/AFP (Getty Images)

Update: Boeing delivered its fewest planes in years — and recovering from the strike will take weeks

Boeing (BA) is going ahead with its plan to lay off 10% of its global workforce. Though the company’s machinist strike ended last week, it is moving ahead with its quest to cut costs amid massive financial losses.

Reuters reports that the Society of Professional Engineering Employees in Aerospace, the union representing Boeing engineers, received word from Boeing that 60-day layoff notices would be issued to its members this Friday. Seattle-area CBS (PARA) affiliate KIRO says that the machinists’ union, the International Association of Machinists and Aerospace Workers, has no updates to share.

And Boeing said Tuesday that October saw it deliver the smallest number of planes in years. The company delivered only 14 commercial airplanes last month, including to Southwest Airlines (LUV) and United Airlines (UAL) less than half of the 34 jets it delivered to customers during the same period last year, and its fewest since November 2020.

When Boeing first announced the layoffs, it blamed the move on “near-term challenges” tied to the strike. But it is becoming clearer that the company’s cash-conscious caution will not end now that the machinists are back at work. Despite raising mountains of cash to refill its stoppage-drained coffers, the company still has a long way to go to dig itself out of the $6 billion loss it incurred last quarter.

“We continue to take a tough, but necessary actions to preserve cash and safeguard our future,” CEO Kelly Ortberg told analysts during Boeing’s earnings call last month. “We’ve worked across our supply chain partners to significantly reduce expenditures, while balancing the associated trade-offs.

“We shared plans to reduce our workforce to align with our financial reality and a more focused set of priorities,” Ortberg continued. “We’re decisively implementing reductions to our discretionary spending across the company. As we move through this process, we’ll maintain our steadfast focus on safety, quality, and delivery for our customers.”

Besides the strike, Boeing’s ability to ramp things up on production of its key 737 Max model is still limited by a slowdown imposed by the Federal Aviation Administration after a door plug blew out on a 737 Max 9 in January.

—Britney Nguyen contributed to this article.

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