Boeing Freezes Hiring and Considers Layoffs Amid Machinists’ Strike

Boeing has announced a hiring freeze across its organization in response to a strike initiated by 33,000 machinists last Friday. The company describes this strike as potentially harmful to its ongoing operations.

In addition to halting new hires, Boeing is pausing all pay raises and promotions, and restricting non-essential business travel as part of a broader cost-cutting strategy. These actions represent the company’s efforts to mitigate the financial impact that the strike is beginning to impose.

The measures taken by Boeing include further cutbacks on corporate travel, specifically eliminating first- and business-class options. Moreover, spending on outside consultants, charitable contributions, as well as advertising and marketing, has also been halted. The intent behind these measures, according to Boeing Chief Financial Officer Brian West, is to conserve cash and ensure the company’s ongoing viability.

West communicated in a memo addressed to employees that the strike significantly jeopardizes the company’s recovery efforts. Boeing emphasized its commitment to maintain funding in critical areas, particularly those that ensure safety, quality, and direct support to customers. “This strike jeopardizes our recovery in a significant way, and we must take necessary actions to preserve cash and safeguard our shared future,” West stated. He also noted that the company is engaged in negotiations with the two unions representing the striking workers.

As part of the company’s cost management strategy, West revealed that Boeing is contemplating temporary furloughs for “many” employees, including managers and executives, in the weeks ahead. However, he did not provide specifics regarding the number of layoffs that might occur. Further details about these plans are expected to be shared shortly.

The International Association of Machinists and Aerospace Workers has been on strike since last week, having voted against Boeing’s latest contract offer. This rejected proposal included a wage increase of 25% spread over four years, which would raise the average salary of machinists from $75,608 annually, excluding overtime, to $106,350 by the contract’s conclusion.

Those on strike are assembly workers responsible for producing some of Boeing’s most significant aircraft, including the 737 Max, the 777 commercial jet, and the 767 cargo plane at factories located in Renton and Everett, Washington. If the strike continues, Boeing is likely to halt manufacturing operations for these aircraft. It’s noteworthy that the Boeing 787 Dreamliner is manufactured by nonunion workers based in South Carolina.

Prior to this strike, Boeing was already grappling with financial difficulties and challenges to its reputation. Since the beginning of 2019, the company has reported losses exceeding $25 billion attributable to various manufacturing issues. Furthermore, its operations have come under scrutiny from federal regulators throughout this year.

As the situation unfolds, the potential long-term implications of the strike could affect not only Boeing’s negotiations with its workforce but also its overall financial health and recovery strategy in the competitive aviation market.