Boeing to cut 17,000 workers • Washington State Standard

Boeing said Friday it would slash about 17,000 employees, roughly 10% of its workforce, and that it would end production of a cargo airplane made in Washington.

The move comes as aircraft machinists in the Puget Sound region and other parts of the West Coast have been on strike for nearly a month after rejecting a contract offer from the company in September. Contract negotiations stalled earlier this week and manufacturing remains halted at Boeing sites around the region.

Before the strike, the company was already facing financial losses and mounting debt.

“We need to be clear-eyed about the work we face and realistic about the time it will take to achieve key milestones on the path to recovery,” Boeing President and CEO Kelly Ortberg said in a message to employees.

“We also need to focus our resources on performing and innovating in the areas that are core to who we are, rather than spreading ourselves across too many efforts,” he added.

Ortberg said layoffs will occur “over the coming months” and involve executives, managers and employees.

In addition to the workforce reductions, Boeing said it would end production of its 767 commercial freight plane in 2027 after delivering aircraft already ordered. The plane is built in Everett. The company will also further delay its 777X program, with first deliveries now expected in 2026. That plane is made in Everett as well.

Meanwhile, about 30 members of Congress, including Democratic U.S. Rep. Pramila Jayapal of Washington, sent a letter to Ortberg and Jon Holden, president of the International Association of Machinists Local 751, this week, urging the parties to “bargain in good faith to reach a fair contract in a timely manner.” 

They also highlighted that Boeing’s CEO received compensation totaling more than $32 million in 2023. Ortberg took over as CEO in August.

Talks between the company and the International Association of Machinists and Aerospace Workers have been taking place through a federal mediator since the roughly 33,000 workers went on strike last month.

Boeing made a fresh offer on Sept. 23 that would’ve raised wages by 30% over four years. It would’ve also doubled a ratification bonus to $6,000 and reinstated an annual bonus. And workers would’ve received a 100% match on 401(k) contributions up to 8% of pay. The company said Tuesday it had withdrawn that offer and that “further negotiations do not make sense at this point.”

The union has pushed for a 40% pay hike and restoration of a defined-benefit pension plan.

Boeing has faced recent scrutiny over its safety record after a door plug blew out of a 737 Max earlier this year and the company was penalized with hundreds of millions of dollars in fines over deadly crashes in 2018 and 2019.

The aerospace giant posted a quarterly loss of more than $1.4 billion in the second three months of the year and saw its debt rise to nearly $58 billion from $48 billion during that time.

On Friday, Boeing said it expects to recognize pretax costs of $3 billion related to the 777X and 767 programs and another $2 billion tied to defense, space and security programs. It anticipates third-quarter revenue of $17.8 billion, with $1.3 billion in negative operating cash flow. The company plans to report full third-quarter financial results on Oct. 23.

The strike has idled multiple facilities around the Northwest, including those in Renton, Everett, Auburn and Frederickson in Washington, and Gresham and Portland in Oregon. Because of the strike, work has paused on several commercial airplane models, including the 737 Max, 767 and 777, and some military aircraft.

Ortberg last month announced temporary furloughs for employees, including executives and managers, to preserve cash amid the strike. He said in his note on Friday that, with the forthcoming job cuts, the company would not proceed with the next cycle of furloughs.

“The state of our business and our future recovery require tough actions,” he added.