Boeing is facing challenging times as it grapples with a significant worker strike. This week, the company’s Chief Financial Officer, Brian West, shared some tough news with employees.
In a memo circulated on Monday, West outlined ten immediate cutbacks including a hiring freeze, the suspension of pay raises for promotions, and limitations on non-essential travel, according to the Associated Press.
He also mentioned that temporary furloughs for employees, managers, and executives might be on the table in the near future. The need for these cutbacks is largely attributed to the ongoing strike by approximately 33,000 workers, represented by the International Association of Machinists and Aerospace Workers.
This strike started early Friday after workers turned down a contract offering a 25% wage hike over four years. West pointed out that the strike presents a significant threat to Boeing’s efforts to recover from financial distress.
Brian Bryant, president of the IAM, declared the rejection of Boeing’s contract a victory for workers’ rights in the aerospace sector. He asserted that the union stands united in demanding a fair deal for its members.
Boeing has been struggling financially, with losses exceeding $25 billion since 2019, including $4.3 billion in just the second quarter of 2024. Stephanie Pope, head of Boeing’s commercial airplanes division, urged employees to consider the company’s “best-ever” contract offer, which was backed by union negotiators.
Before and after the strike vote, workers voiced a desire for pay increases of at least 40% and requested the reinstatement of bonuses that the company plans to cut.
Additional measures mentioned in West’s memo include terminating first- and business-class travel for essential trips and stopping outside consultancy expenditures. The company also intends to significantly reduce supplier spending and pause most orders for 737, 767, and 777 models.
This article includes reporting from the Associated Press.