CEO Kelly Ortberg said on Thursday that employees furloughed during a seven-week strike by factory workers would be repaid by the company for lost wages, but it would proceed with plans to cut about 10% of its global workforce.
"Your sacrifice made a difference and helped the company bridge to this moment," Ortberg told staff in an email seen by Reuters. "We want to acknowledge your support by returning your lost pay if you went on unpaid furlough."
Boeing is dealing with morale issues as it moves ahead with its job cuts, with many of the employees due to be notified about the future of their roles this month.
"We will continue forward with our previously announced actions to reduce our workforce levels to align with our financial reality and a more focused and streamlined set of priorities," Ortberg wrote to staff. "These structural changes are important to our competitiveness and will help us deliver more value to our customers over the long term."
A spokesperson for the Society of Professional Engineering Employees in Aerospace, which represents Boeing engineers, said earlier it was informed that 60-day notices of job losses would be issued to its members on Nov. 15.
Boeing on Monday won ratification of a contract giving its machinists a 38% pay hike over four years and a $12,000 bonus, ending the strike.
Those workers are due back by Nov. 12. Boeing has not said yet when it plans to resume production of the 737 MAX, but has indicated it will be gradual and under regulatory scrutiny.
The planemaker has racked up losses of nearly $8 billion this year as it continues to wrestle with a quality crisis from a January mid-air panel blowout.
"We have hard work ahead to restore our company and deliver on our customer commitments, but we are on the right path and making the right changes," Ortberg wrote.
Boeing raised $24 billion in fresh capital last month to shore up its finances. Ortberg said last month he is reviewing Boeing's businesses and long-term forecasts.
The company may end up selling some assets, as it downsizes its workforce to focus on the company's key civil planemaking and core defense units.
Ortberg's email was reported earlier by the Air Current, an aviation industry publication.
The number of Americans applying for jobless aid ticked up last week but layoffs remain at historically low levels.
The Labor Department reported Thursday that jobless claim applications rose by 3,000 to 221,000 for the week of Nov. 2. That’s fewer than the 227,000 analysts forecast.
The four-week average of weekly claims, which softens some of the week-to-week fluctuations, fell by 9,750 to 227,250.
Weekly applications for jobless benefits are considered representative of U.S. layoffs in a given week.
Continuing claims, the total number of Americans collecting jobless benefits, rose by 39,000 to 1.89 million for the week of Oct. 26. That’s the most since late 2021.
In response to weakening employment data and receding consumer prices, the Federal Reserve slashed its benchmark interest rate in September by half a percentage point as the central bank shifted its focus from taming inflation toward supporting the job market. The Fed is hoping to execute a rare “soft landing,” whereby it brings down inflation without tipping the economy into a recession.
It was the Fed’s first rate cut in four years after a series of increases starting in 2022 that pushed the federal funds rate to a two-decade high of 5.3%.
The Fed is expected to announce later Thursday that it has cut its benchmark borrowing rate by another quarter point.
Inflation has retreated steadily, approaching the Fed’s 2% target and leading Chair Jerome Powell to declare recently that it was largely under control.
Last week, the government reported that an inflation gauge closely watched by the Fed fell to its lowest level in three-and-a-half years.
During the first four months of 2024, applications for jobless benefits averaged just 213,000 a week before rising in May. They hit 250,000 in late July, supporting the notion that high interest rates were finally cooling a red-hot U.S. job market.
In October, the U.S. economy produced a meager 12,000 jobs, though economists pointed to recent strikes and hurricanes that left many workers temporarily off payrolls.
In August, the Labor Department reported that the U.S. economy added 818,000 fewer jobs from April 2023 through March this year than were originally reported. The revised total was also considered evidence that the job market has been slowing steadily, compelling the Fed to start cutting interest rates. 2021.
.webp)