Boeing plans to cut 5% of its Commercial Airplanes workforce. REUTERS/Benoit Tessier//File Photo
Boeing said it plans to reduce about 5% of its commercial airplane workforce through a combination of attrition and layoffs, as the aerospace giant grapples with a slower-than-expected production ramp-up across its jet programmes. “Unfortunately, that means we need to align our staffing levels to our revised business plan, resulting in a reduction of approximately 5% through a combination of attrition and involuntary layoffs, with notifications beginning in December. The planned cuts come as Boeing continues efforts to stabilise production of its bestselling 737 Max aircraft, manufactured near Seattle. Last month, Boeing CEO Kelly Ortberg told investors that the company does not expect a significant increase in 737 Max production until the second half of next year. The company is also targeting a production rate of 52 aircraft per month in the second half of 2027. Ortberg has previously said Boeing is presently working to stabilise output at roughly 47 Boeing 737 Max jets per month before pursuing a more aggressive production increase.
The company also revealed that the employee notifications about the job cuts will begin starting December.
“Adjusting our production schedules and reducing aircraft output puts us in an overstaffed position,” Pope wrote in the note. The mismatch between staffing levels and revised manufacturing plans has left the commercial aircraft division with more employees than required under current production forecasts, according to Pope. The company had been working to increase output, but executives recently acknowledged that the production recovery is progressing more slowly than anticipated. He cited slower-than-expected wing production as one of the factors limiting the ramp-up. Despite the job cuts, the CNBC report suggests that Boeing remains focused on increasing production rates over the longer term. The recent round of layoffs underscore the challenges Boeing is facing as it seeks to rebuild the manufacturing momentum while balancing costs and also adjusting to a slower recovery timeline. You use AI every day. Now get your AI Quotient. Take the AIQ test.
In a memo to employees on Monday, Stephanie Pope, head of Boeing Commercial Airplanes, said the company needs to align staffing levels with revised production plans after adjusting its manufacturing schedules and lowering aircraft output targets, according to a report by CNBC.