Boeing announced several cutbacks this week as the company faces a “difficult” worker strike.
On Monday, Boeing Chief Financial Officer Brian West sent a memo to employees stating that the company will be making ten immediate cutbacks. In the memo, some of the cutbacks included a hiring freeze at all levels, halting pay raises for promotions, and restricting all non-essential travel, the Associated Press reported.
“We are also considering the difficult step of temporary furloughs for many employees, managers and executives in the coming weeks,” West said in the memo.
The memo also noted that the cutbacks, which included a decrease in supplier spending, were necessary because the company was “in a difficult period” amid a recent factory workers strike.
“This strike jeopardizes our recovery in a significant way,” West added.
Around 33,000 workers, represented by the International Association of Machinists and Aerospace Workers, went on strike early Friday after rejecting an offer that included a 25 percent pay raise over four years.
A Boeing worker arrives at the Aerospace Machinists Union building in Renton, Washington, on September 12. Boeing announced immediate cutbacks amid a recent workers strike on September 16.
JASON REDMOND/AFP via Getty Images/Getty Images
Last week, Brian Bryant, the International President of the International Association of Machinists and Aerospace Workers (IAM), issued a statement on the strike: “Our members’ rejection of Boeing’s contract was a resounding victory for the entire aerospace industry and workers’ rights. Boeing must now deliver a contract that respects their value and gives them the dignity they deserve.”
“The IAM stands firmly behind our members. Together, we will fight until Boeing offers a deal that our members will accept. Our strength lies in our unity, and we will not back down until they receive the compensation they have earned,” Bryant added.
Since the beginning of 2019, Boeing has lost over $25 billion, including $4.3 billion in the second quarter of 2024 alone, as the company braces for another year of financial losses.
Stephanie Pope, head of Boeing’s commercial airplanes division, pointed to the company’s $60 billion in total debt while urging blue-collar workers to accept last week’s contract offer. She described it as Boeing’s best-ever offer, endorsed by the union’s local president and negotiators.
Workers who spoke out before and after the Thursday strike vote expressed their demand for raises totaling at least 40 percent and the restoration of bonuses that Boeing plans to cut.
Additional cost-cutting measures outlined in the CFO’s memo include eliminating first- and business-class travel for those still required to travel and halting expenditures on outside consultants.
West announced that Boeing plans to make “significant reductions in supplier expenditures” and will halt most supplier purchase orders for the 737, 767, and 777 models.
This article includes reporting from the Associated Press.
