Boeing to cut 5pc of commercial jet workforce

Boeing Commercial Airplanes is set to reduce its commercial jet workforce by five percent as the company grapples with rising jetliner production challenges, according to a memo addressed to employees. Division chief Stephanie Pope informed staff that this adjustment is necessary to stabilize production rates and alleviate an overstaffed situation.

The reductions will be implemented through attrition and involuntary layoffs, with notices to be sent out by the earliest part of the following month, as per the memo disclosed to Reuters.

Boeing's CEO, Kelly Ortberg, disclosed to analysts earlier this month that the company would fall short of its 737 jetliner production and delivery targets for the current year. Currently, Boeing anticipates achieving a production rate of 47 jets per month early next year, a delay from the previously projected summer timeline. Additionally, the company expects to achieve US$10 billion in free cash flow a year later than anticipated, by 2029, a figure significant in Boeing's financial recovery journey following a series of crises and controversies that have tarnished its reputation, strained its finances, and led to heightened regulatory oversight.

A key focus for Boeing is expanding production of its popular 737 narrow-body jet, which serves as the company's primary revenue driver, necessitating higher output for a robust recovery. The Seattle-based division of Boeing, which employed 50,494 people up to December last year, has also faced difficulties in increasing the output of its 787 wide-body jet from eight aircraft per month to the targeted ten per month.