Boeing has announced a company-wide hiring freeze and is considering temporary layoffs as part of its response to the ongoing strike by approximately 33,000 machinists.
The strike, which began last week, has led the aerospace giant to implement several cost-cutting measures aimed at preserving cash and mitigating the financial toll on the business.
In a memo to employees, Boeing Chief Financial Officer Brian West detailed additional measures, including the suspension of pay raises and promotions, a halt on non-essential business travel, and reduced spending on suppliers. The company is also pausing corporate first- and business-class travel, charitable contributions, and advertising. These steps come as Boeing faces significant financial challenges, with the strike impacting production and delaying the delivery of key aircraft models.
West highlighted the gravity of the situation.
“This strike jeopardizes our recovery in a significant way, and we must take necessary actions to preserve cash and safeguard our shared future,” West wrote.
He emphasized the company’s commitment to safeguarding operations related to safety, quality, and direct customer support. Despite these assurances, Boeing is evaluating the possibility of furloughing employees, managers, and executives in the near future.
The strike, organized by the International Association of Machinists and Aerospace Workers, follows the rejection of Boeing’s latest contract proposal, which included a 25% wage increase over four years. Union members, however, are demanding a 40% increase, citing past wage stagnation and the loss of bonuses and pensions. The striking workers are responsible for building Boeing’s 737 Max, 777, and 767 aircraft, and the company may be forced to halt production if the strike continues.
Boeing has already faced significant financial setbacks in recent years, losing over $25 billion since 2019. The company’s efforts to recover have been further complicated by the ongoing labor dispute, with rating agencies considering downgrading Boeing’s credit as the strike prolongs. Negotiations between the company and union are expected to resume with federal mediators.
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