Boeing Tells Employees More Layoffs Coming in 2017

ST. LOUIS (KMOX) – Boeing’s CEO sent a letter to all its employees Monday to inform them that more layoffs should be expected in 2017.

By the end of 2016, the company says a total of 8 percent of its workforce will have been cut since January.

The letter states that the recent announcement of fewer 777s in production per month shows the “dynamic business climate in which we currently operate.”

Related story: Boeing Moving Defense & Space Unit HQ from Hazelwood

According to Boeing employment data, reports CNBC, more than 6,000 jobs were cut between January and November of this year at Boeing.

Here is the entire letter sent to employees:

Earlier this year, we committed to competiveness initiatives to better position Boeing Commercial Airplanes in the marketplace. We believe it is important to be accountable to you concerning the 2016 results, and to let you know we will continue these efforts in 2017 so we remain the true industry leader next year and in the future.

The recent 777 rate-reduction announcement is the latest sign that the market is signaling near-term hesitation for twin-aisle aircraft in certain regions. But it also illustrates the dynamic business climate in which we currently operate; an environment characterized by fewer sales opportunities and tough competition.

We continue to follow our plan announced earlier this year to make fundamental changes to win in the market, fund our growth and operate as a healthy business. Teams across Commercial Airplanes have been focusing on the Keys to Winning to improve first-time quality, productivity and safety, and reduce waste. We reduced total employment this year mostly through attrition, not backfilling open positions, and voluntary layoffs (VLOs). We achieved further supply chain savings, sought ways to more efficiently manage use of our facilities and cut discretionary spending, including travel and other non-production costs.

While we have made progress in reducing costs and improving affordability, we will need to do more in 2017. This means we will continue working aggressively across BCA to reduce non-labor costs.

It also means we will need to continue to reduce the size of our workforce next year. By the end of this year, we anticipate a reduction of 8 percent in total BCA employment since January. This includes a 10-percent reduction of executives and managers. In 2017, we will continue to focus efforts on matching employment levels to business and market requirements.

Once again, we will accomplish these reductions through a combination of attrition, leaving open positions unfilled where appropriate, and offering a VLO program in early 2017. Where needed and in some circumstances, we may also need to use involuntary layoffs.

Right now, each BCA organization is analyzing its 2017 budget and staffing plans. The leaders of your respective organizations will share more information on staffing plans and the specific skills offering VLOs or other employment actions soon. We believe it is important to let you know the situation up front so you are aware as you make plans and decisions for the coming year.

Our product lineup is the best in the industry and we have achieved a healthy backlog that currently sustains us. There are tremendous opportunities ahead. But to successfully compete and win new orders that will fund future product development and growth requires us to achieve much better performance. Continuing the actions to fundamentally improve our overall competitiveness will ensure our future leadership in the marketplace.

Ray Conner
Vice Chairman
The Boeing Company

Kevin McAllister
President & CEO
Boeing Commercial Airplanes

The letter is courtesy of KING5.

(TM and Copyright 2016 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2016 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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