Boeing Cuts Jobs for Christmas

Poor 777 sales leads to sweeping cost cuts for jet maker.

The Boeing 777 production line at the Everett, Washington plant. (Image courtesy of Mike Siegel/The Seattle Times.)

The Boeing 777 production line at the Everett, Washington plant. (Image courtesy of Mike Siegel/The Seattle Times.)

Boeing has some bad news for its employees in Washington state, just prior to Christmas.

While sales of smaller, single-aisle jets may be on the up, the company’s wide-body 777 jets are facing a slump, which has led to the company cutting production numbers – and jobs. The news follows a year where Boeing has already cut around 6,600 jobs in Washington and plans to cut more in 2017.

A joint message from company vice chairman Ray Conner and the new chief executive of Boeing Commercial Airplanes (BCA), Kevin McAllister, cited a business climate with “fewer sales opportunities and tough competition” as key reasons for the need to drive for further cuts in 2017.

“We will continue working aggressively across BCA to reduce non-labor costs,” their message stated. “We will need to continue to reduce the size of our workforce next year.”

The job cuts will come about through attrition. The company will not be hiring for open positions and a voluntary buyout program in early 2017 will offer employees a week’s pay for each year of service up to a maximum of 26 weeks.

The message from Conner and McAllister also warned that involuntary layoffs may be necessary as well.

The Boeing 777 production line at the Everett, Washington plant. (Image courtesy of Ken Lambert/The Seattle Times.)

The Boeing 777 production line at the Everett, Washington plant. (Image courtesy of Ken Lambert/The Seattle Times.)

Boeing saw just 17 net orders for the 777 this year, while initial sales targets were closer to 40. This will lead to reductions in production, equaling five jets per month starting in the summer of 2017, down from seven.

Boeing has let go of 10 percent of executive and managerial staff, compared to 8 percent of the factory workforce. Changes to the production supply chain may have an impact on aerospace companies throughout the region.

While unfortunate for employees working on the 777, Boeing has forecasted increased sales of its smaller jets for the future. This may keep the company going, while facing stiff competition from both Airbus and domestic offerings worldwide.

For more information, check out how Boeing is working to help STEM education in Washington state, or take a look at a comparison between the new single-aisle jets from Boeing and Airbus.