Boeing has begun issuing layoff notices to approximately 17,000 employees, representing 10% of its global workforce, as part of a strategy to weather its current financial storm. The layoffs – expected to take effect by mid-January 2025 – come on the heels of a turbulent labour strike and aim to bring the workforce in line with the company’s pressing financial realities and operational priorities.

Boeing CEO Kelly Ortberg underscored the need for sweeping changes to keep the aerospace giant aloft amidst significant turbulence, including production delays following past aircraft mishaps, the recent strike, and staggering losses of more than US$25 billion over the past five years.

“We need to focus our resources on performing and innovating in the areas that are core to who we are,” Ortberg said, as he laid out the blueprint for Boeing’s recovery.

In a note accompanying Boeing’s third-quarter results, Ortberg said: “It will take time to return Boeing to its former legacy but, with the right focus and culture, we can be an iconic company and aerospace leader once again. We will be focused on fundamentally changing the culture, stabilising the business and improving program execution, while setting the foundation for the future of Boeing.”

Concerns over Boeing’s recovery

Boeing’s path to recovery appears fraught with challenges. The Federal Aviation Administration has already clipped its wings by limiting production capacity, resulting in surplus roles in certain areas.

Industry analysts warn that trimming the workforce may leave Boeing short-staffed at a critical juncture, potentially derailing delivery schedules for flagship aircraft models like the beleaguered 777X.

Despite raising over $24 billion to stabilise its finances, Boeing’s stock has taken a nosedive, reflecting growing investor scepticism about its ability to regain altitude.

Affected employees will remain on payroll until 17 January, with severance packages and career transition support provided. However, the looming job cuts have cast a long shadow over morale. Employees, who have already endured a strike and ongoing production woes, are left navigating a minefield of uncertainty.

Some expressed cautious optimism that blue-collar roles might be spared the axe, while others acknowledged the necessity of these tough measures given Boeing’s precarious financial position. For many, however, the writing on the wall has fuelled apprehension about job security and the company’s future.

Also Read: Boeing cuts 17,000 jobs globally amid mounting chaos

Boeing offers support for retrenched employees

In a bid to soften the blow, Boeing has outlined a suite of support measures for those being shown the door:

1) Income continuation

Non-represented employees will receive a minimum of four weeks’ income continuation following a 60-day notice period, with tenure requirements waived.

2) Severance pay

Severance packages will be based on length of service, with at least four weeks’ pay guaranteed for all affected employees.

Also Read: Boeing CEO Dave Calhoun departs in leadership shakeup

3) Health benefits

Health benefits will continue for three months post-layoff, offering a brief safety net for employees during the transition.

4) Career transition support

Boeing’s Worklife programme will provide career counselling and job placement assistance, helping employees find new landing spots.

Boeing’s long-term plan after job cuts

Looking beyond the immediate turbulence, Boeing’s long-term plans involve reshaping its workforce and operations to soar higher in a competitive market. The company has announced a hiring freeze and a strategy to streamline its structure, aiming to emerge leaner and more agile.

Ortberg emphasised the importance of structural changes to trim the fat and sharpen Boeing’s competitive edge.

Additionally, the company is revising its product roadmap, with the delayed 777X now targeted for delivery in 2026. The focus is on rebuilding trust in Boeing’s brand while stabilising operations amidst ongoing headwinds.

To future-proof the business, Boeing is banking on several key strategies:

1) Diversification of product portfolio

By expanding into rotorcraft, rockets, and satellites, Boeing hopes to spread its bets and reduce vulnerability to market fluctuations.

2) Technological advancements

Investments in electric propulsion and autonomous flight aim to keep Boeing at the cutting edge of aerospace innovation.

3) Sustainable aviation initiatives

The company is embracing eco-friendly practices, betting big on sustainable aircraft to meet rising environmental expectations.

4) Global market expansion

Strategic partnerships and new manufacturing hubs in emerging markets will help Boeing tap into fresh customer bases.

5) Digital transformation

Data analytics and automation will drive efficiency and enhance customer experiences, giving Boeing a high-tech boost.

These initiatives form the backbone of Boeing’s plan to regain its altitude and reclaim its position as a leader in the skies.