Boeing lays off thousands of white-collar workers during strike

Selected employees will take one week of vacation every four weeks on an ongoing basis, Ortberg wrote. Employees will learn details about how their specific team is affected on the same day. The memo did not specify how many employees would be affected.

In the email, Ortberg also said he and his management team will “take a proportionate reduction in pay for the duration of the strike”. The note did not specify the size of the salary cut.

The layoffs are aimed at conserving cash as the strike halts production of key planes such as the 737 MAX.

In a union vote on September 12, workers voted against an agreement that Boeing and the union for machinists and aerospace workers had proposed. The vote was the first full contract vote in 16 years and did not go in Boeing’s favor: nearly 95 percent voted to reject the contract and 96 percent voted to strike.

The strike is another headache for the American aircraft manufacturer, ie Struggling with safety and reputation issues after taking more shots this year. It’s also a big blow to Ortberg, who stepped into his CEO role about two months ago.

Cash preservation is critical for heavily indebted Boeing, which knows exactly how costly strikes can be. from Boeing the last strike, in 2008, continued for nearly two months, causing the company to deliver about 70 fewer commercial jets than usual in the affected quarter. The withdrawal reduced revenue in the period by $4.3 billion, Boeing said at the time.

Along with the furloughs, the company banned employees and executives from flying business class, instituted a hiring freeze and halted pay raises for managers, according to a separate memo sent to employees Monday.

Boeing did not immediately respond to a request for comment from Business Insider sent outside regular business hours.

Read the full memo Ortberg sent to employees:

Team,

As you know, IAM 751 and W24 went on strike last Friday. We are committed to restoring our relationship with our represented employees and continuing discussions with the union to reach a new agreement that is good for all our colleagues and our company as soon as possible.

However, with production disrupted for many key programs in the Pacific Northwest, our business faces substantial challenges, and it is important that we take difficult steps to preserve cash and ensure that Boeing can successfully recover.

As part of this effort, we are initiating temporary furloughs in the coming days that will affect a large number of US executives, managers and employees. All benefits will continue for affected employees, and to limit the impact on you, we plan to have selected employees take one week off every four weeks on an ongoing basis for the duration of the strike. Your leaders will be in touch today to share more details about your team’s specific approach.

With these steps, my management team and I will take a proportionate reduction in pay for the duration of the strike.

Most importantly, we will not take any action that will hinder our ability to fully recover in the future. All activities critical to safety, quality, customer support and key certification programs will be prioritized and continue, including 787 production.

While this is a tough decision that affects everyone, it is in an effort to preserve our long-term future and help us get through this very difficult time. We will continue to communicate transparently as this dynamic situation evolves and do everything we can to limit this difficulty.

Restoring trust,
Kelly

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