SEATTLE, WA – JUNE 29: A Boeing 737 MAX aircraft lands following a FAA recertification flight at Boeing Field on June 29, 2020 in Seattle, Washington. The 737 MAX has been grounded for commercial flights since March of 2019 following two crashes. In the background is a Boeing 777X test plane. (Photo by Stephen Brashear/Getty Images)
Boeing said Friday it would cut about 17,000 employees, roughly 10% of its workforce, and that it would end production of an airplane made in Washington.
The move comes as aircraft machinists in the Puget Sound region and other parts of the West Coast have been on strike for nearly a month after rejecting a contract offer from the company in September. Contract negotiations stalled earlier this week.
“We need to be clear-eyed about the work we face and realistic about the time it will take to achieve key milestones on the path to recovery,” Boeing President and CEO Kelly Ortberg said in a message to employees.
“We also need to focus our resources on performing and innovating in the areas that are core to who we are, rather than spreading ourselves across too many efforts that can often result in underperformance and underinvestment,” he added.
Ortberg said the layoffs will occur “over the coming months” and involve executives, managers and employees.
In addition to the workforce cuts, Boeing said it would end production of its 767 commercial cargo plane in 2027 after delivering aircraft already ordered. The plane is made in Everett. The company will also delay its 777X program. That plane is also made in Everett.
Meanwhile, about 30 members of Congress, including U.S. Rep. Pramila Jayapal of Washington, sent a letter to Ortberg and Jon Holden, president of the International Association of Machinists Local 751, this week, urging the parties to “bargain in good faith to reach a fair contract in a timely manner.”
They also highlighted that Boeing’s CEO received compensation totaling more than $32 million in 2023. Ortberg took over as CEO in August.
Talks between the company and the International Association of Machinists and Aerospace Workers have been taking place through a federal mediator since the roughly 33,000 workers went on strike last month.
Boeing made a fresh offer on Sept. 23 that would’ve raised wages by 30% over four years. It would’ve also doubled a ratification bonus to $6,000 and reinstated an annual bonus. And workers would’ve received a 100% match on 401(k) contributions up to 8% of pay.
The union has pushed for a 40% pay hike and restoration of a defined-benefit pension plan.
Boeing has faced mounting debt, scrutiny over its safety record after a door plug blew out of a 737 Max earlier this year, and hundreds of millions of dollars in fines over deadly crashes in 2018 and 2019.
The strike has idled multiple facilities and fabrication sites around the Northwest, including those in Renton, Everett, Auburn and Frederickson in Washington, and Gresham and Portland in Oregon.
Due to the stoppage, work has been paused on three commercial airplanes, the 737 Max, 767 and 777, and three military aircraft, the KC 46A Pegasus refueling tanker, P-8 Poseidon patrol plane, and the E-7 Wedgetail, an early warning and reconnaissance plane.