Boeing Co. will begin sending out layoff notices on Wednesday as the aerospace giant starts its planned workforce reduction to streamline operations while preserving its skilled labor force. In April, the company announced a 10% workforce reduction of about 17,000 jobs as it tries to recover from several blows, including a dramatic production slowdown after an almost catastrophic incident in January and a strike that shut down most operations for seven weeks.
While the cuts are part of the effort to streamline the operations, there is a growing concern that overly aggressive cuts may hurt Boeing’s recovery from years of turmoil. The company benefited in the past as furloughed workers went back to their jobs. That pattern was disrupted when Boeing and other companies laid off permanent employees for the first time during the COVID-19 pandemic, with many veteran engineers and mechanics leaving the industry altogether.
But today’s job market gives Boeing further challenges. With a Seattle unemployment rate hovering around 4%, aerospace pros are in high demand thanks to the region’s growing space economy. Competitors including SpaceX, Blue Origin, and Amazon’s Project Kuiper also hunt for fresh talent in satellite development, rocket technology, and lunar missions.
Industry analyst Stan Shull estimates that there are 1,350 open positions at 50 space-related companies in the Puget Sound region. Those jobs run the gamut from engineering to administrative. Richard Aboulafia, managing director at AeroDynamic Advisory, added that competition for skilled labor will increase as the labor market tightens and Boeing starts hiring again soon.
While the recent strike came to a close with a settlement that included a 38% wage increase, it has only served to gall the relationship between workers and the company. Many are still resentful toward the company for supposedly not compensating them well enough over all these years; hence, old disgruntlement remains.
New CEO Kelly Ortberg, who took the reins in August, has been working to cut inefficiencies and said the job cuts are part of a larger effort to simplify operations. “We need to reset priorities and create a leaner, more focused organization,” Ortberg said on an earnings call. The goal he said is to bring together fragmented areas that may lack efficiency and eliminate non-core work.
