Two days after announcing a hiring freeze, Boeing has announced that it plans to furlough employees on a rolling basis as strike action continues.
On September 18, 2024, Boeing’s CEO Kelly Ortberg issued a memo to staff, stating that the layoffs are expected to start in the coming days and will impact “a large number of US-based executives, managers, and employees”.
“With production paused across many key programs in the Pacific Northwest, our business faces substantial challenges, and it is important that we take difficult steps to preserve cash and ensure that Boeing is able to successfully recover,” Ortberg said.
Ortberg said that all benefits will continue for affected employees, but the company is planning for selected employees to take “one week of furlough every four weeks on a rolling basis for the duration of the strike”. Along with these steps, the company’s leadership will take a “commensurate pay reduction” for the remainder of the strike.
Boeing said it will continue discussions with workers to reach a new agreement that is good for both employees and the company as soon as possible.
“We will continue to transparently communicate as this dynamic situation evolves and do all we can to limit this hardship,” Ortberg added.
The strike is halting the production of several Boeing models, including its bestselling aircraft, such as the 737 MAX, the 787, and the 777. As the strike continues, it is rapidly decreasing Boeing’s cash flow.
The decision to furlough workers comes after 33,000 Boeing machinists went on strike on September 13, 2024, turning down an offer for a 25% pay increase over four years. Long-term employees, with around 16 years at the company, were seeking raises of at least 40% and additional benefits in the contract offer they rejected.
The strike has already put Boeing’s credit rating in jeopardy at a time when the company is still dealing with the aftermath of the Alaska Airlines 737 MAX 9 door plug blowout on January 5, 2024.
In addition, NASA recently left two of its astronauts stranded in space, instead of returning them on a Boeing CST-100 Starliner which developed several safety issues.
