Boeing To Repay Furloughed Employees, But Will Still Proceed With Job Cuts

Boeing said Thursday that it will repay employees furloughed during the seven-week strike for lost wages but remains steadfast on its plans to reduce its workforce.

The planemaker's CEO, Kelly Ortberg, stated that while factory workers would be repaid for lost wages, the company would still go ahead with its plans to slash approximately 10% of its workforce globally, Reuters reported.

Following the September strike by 33,000 union machinists, the aviation giant furloughed thousands of salaried employees on a rolling basis and halted production of 737 MAX, its best-selling aircraft. The company then canceled the unpaid leave after revealing plans to cut 17,000 jobs in October.

At the time, Ortberg said that the staff cuts will push the timeline for the 777X program to 2026, while the 767 freighter program will end in 2027. He further said that the company expects to face "substantial new losses" in its Boeing Defense, Space & Security division this quarter, highlighting ongoing challenges within the organization.

"Our business is in a difficult position, and it is hard to overstate the challenges we face together," the company's CEO said at the time. "Beyond navigating our current environment, 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."

In his latest communication to employees, Ortberg said that "your sacrifice made a difference and helped the company bridge to this moment. We want to acknowledge your support by returning your lost pay if you went on unpaid furlough," according to Reuters.

However, the planemaker said it will "continue forward with our previously announced actions to reduce our workforce levels to align with our financial reality and a more focused and streamlined set of priorities."

"These structural changes are important to our competitiveness and will help us deliver more value to our customers over the long term," Ortberg wrote to staff.

The Society of Professional Engineering Employees in Aerospace, which represents Boeing engineers, was informed that members would receive 60-day notices of job losses on Nov. 15.

Earlier this week, the striking workers approved a new contract proposal, which concluded the strike that cost the aviation giant billions. The contract features a 38% wage increase, a $12,000 signing bonus, and enhancements to employer contributions to a 401(k) retirement plan, along with measures to contain healthcare costs.