Boeing will reduce its commercial airplane workforce by roughly 5% through a combination of layoffs and employee attrition, the company said, citing a slower-than-planned production ramp-up. The cuts are intended to give factories and supply chain partners more time to reach stability.
Layoff notifications are scheduled to begin in December. The workforce reduction was communicated via an internal memo from Stephanie Pope, head of Boeing's commercial aircraft unit, who said slowing production schedules and reducing aircraft output had left the company overstaffed and required it to align staffing levels to the revised business plan.
Boeing has pushed back its target of raising 737 Max production to 52 planes per month until the second half of 2027. The company is currently producing approximately 47 737 Max aircraft per month. Boeing previously said it would no longer meet its 2026 delivery target, disclosed in an October conference call.
CEO Kelly Ortberg said the company was still working to reach full stability at its current production rate and expected that work to extend into the following year. He identified wing production pace and fuselage production at Boeing's Kansas operation as the two areas requiring greater consistency.
Boeing has experienced a prolonged period of financial losses connected to safety issues including two fatal crashes involving the 737 Max, one in 2018 and one in 2019. Investors have regarded the increase in 737 Max production rates as central to Boeing's return to revenue and profit growth. Pope pointed to FAA approvals granted this year for the 737 Max 7 and 737 Max 10 as signs of progress in operations.
Workers in Boeing's commercial airplane division face the prospect of involuntary layoffs beginning in December. Airlines and other customers waiting on 737 Max deliveries face a delayed ramp-up, with meaningful production rate increases not expected until the second half of 2027.
Official statements: Boeing
Reporting: The Guardian, CNBC
Background: CNBC, Yahoo Finance
Written by Pick & Scroll News from the reporting and documents linked above.
