Boeing to cut 17,000 jobs amid failed union talks
Boeing, the aircraft manufacturer, plans to lay off about 10 percent of its employees worldwide, including managers and directors. This decision was announced following unsuccessful negotiations with union representatives, who are demanding raises.
Boeing announced that it would lay off about 10 per cent of its global workforce, which translates to approximately 17,000 people—CEO Kelly Ortberg informed employees on Friday. The company will also delay the launch of its 777X aircraft and has stated that its sales figures for the third quarter will probably be significantly lower than analysts on Wall Street predicted.
Boeing to lay off 17,000 people
"Our business is in a difficult position, and it is hard to overstate the challenges we face together. Restoring our company requires tough decisions, and we will have to make structural changes to ensure we can stay competitive and deliver for our customers over the long term," Ortberg wrote in a memo to employees, as reported by Bloomberg.
Analyst Sheila Kahyaoglu, cited by the agency, calculated that the layoffs should bring Boeing about $1.7 (CAD 2.3) billion in savings. She believes this may also signal issues in other companies. "The workforce reductions are what we have seen across smaller suppliers earlier this week, signaling more to come across," Kahyaoglu wrote.
Boeing employees want raises
Boeing's announcement coincides with problems the company is facing. Since September, employees in the US have been on strike, demanding raises. Union representatives argue that the amounts proposed by the company are too low. Bloomberg describes the negotiations as being at a standstill, as neither side is willing to concede. The talks between the unions and the company ended without resolution at the start of the week, and it's unclear if or when they will resume.
The strike involves about 33,000 employees who have been off work for about a month. As Bloomberg highlights, this is detrimental to the company's production. In response to the layoff announcement, the union representing machinists and aerospace workers reminded everyone that the way to resolve the strike situation was to "stay at the table." "CEO Ortberg has an opportunity to do things differently instead of the same old tired labour relations threats," the union representatives emphasized in a statement.
On Friday, Boeing's shares increased by 3 percent following news of the layoffs. However, the company's stock has dropped by 42 percent overall since the beginning of the year.
