Boeing employees will learn Wednesday who will lose their jobs in mid-January in the round of layoffs Boeing announced last month. The cuts will be broadly spread across the company and, despite some expectations earlier, engineers and production workers won’t be exempt.
On an earnings call late last month, new Boeing CEO Kelly Ortberg said that to “reset priorities and create a leaner, more focused organization,” a 10% workforce cut would target overhead and “nonessential” positions, not front-line workers designing and building airplanes.
“We’re going to really focus this workforce reduction in streamlining those overhead activities, consolidating things that can be consolidated,” he said.
“I wouldn’t think of it like we’re going to take people off production or out of the engineering labs,” Ortberg added. “That’s not our intent.”
But a Boeing senior engineering manager in St. Louis said the cuts in the works target a roughly 10% reduction across the engineers supporting military programs, including the F-15 and F/A-18 jet fighters and the Navy’s P-8 submarine hunter, which is built in Renton, Washington, with military systems installed in Seattle.
Those engineering organizations will shrink, said the manager, who asked not to be identified to protect his job. “If the idea in Kelly’s mind is cutting overhead and programs will not be impacted, that’s not what’s happening.”
He said research and development work, and production programs, “will all bleed a little.”
Still, it’s clear non-front-line positions will suffer bigger losses.
And white-collar staff working remotely may be particularly targeted as Ortberg tries to get the workforce connected and aligned with his new direction.
A manager of a small team of about 15 people, all working remotely — and ironically focused on ways to improve efficiency in program management — told one employee to expect a 30% cut in his team.
“If we are not holding a wrench, if we’re considered overhead, it’s about 30%,” said the employee, who also asked not to be identified to protect his job. The reduction for “people working on planes might be less than 5%.”
Boeing decided not to lay off Machinists during the strike, which could have complicated negotiations. However, with the strike ended Nov. 4, some Machinists may also be cut even though Boeing now desperately needs to increase production rates and bring in cash.
Boeing hired mechanics aggressively over the past two years in anticipation of higher production rates that have not materialized.
Before the blowout of a Max fuselage panel on Alaska Airlines flight 1282 in January, Boeing had targeted delivering 38 Maxes a month out of the Renton factory by year end. That rate is now pushed into the second half of next year.
With all Machinists back at work as of Tuesday, production is expected to ramp up only slowly.
Suppliers will take time to gear up again. Some newer hires will have to go through retraining.
And the Federal Aviation Administration put Boeing on notice this week that it must ramp up carefully and methodically to maintain safety and quality.
The FAA in a statement said it “will further strengthen and target our oversight as the company begins its return-to-work.”
Still, Jon Holden, president of the Machinists union 751, in a news conference on the night the strike ended, said “layoffs right now would be very shortsighted.”
With a current order backlog of almost 5,500 airplanes, he said “it’s important to get our membership back in the factories, build the (production) rates and start delivering airplanes.”
“They need us to build them,” Holden added. “I hope the company can reconsider.”
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