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Boeing anticipates its Commercial Airplanes unit’s workforce will be reduced by 8% by the end of 2016 compared to January, and it is planning additional employee reductions in the unit in 2017, which could include involuntary layoffs.
Boeing Commercial Airplanes president and CEO Kevin McAllister and Boeing vice chairman Ray Conner shared the news about job reductions with employees in a Dec. 19 message. McAllister last month succeeded Conner as the head of Boeing Commercial Airplanes.
Boeing revealed last week that the 777 production rate will be reduced from seven per month to five per month in August 2017. “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,” McAllister and Conner wrote in the message to Boeing Commercial Airplanes employees. “But it also illustrates the dynamic business climate in which we currently operate; an environment characterized by fewer sales opportunities and tough competition.”
As a result, in addition to non-labor cost cuts “we will need to continue to reduce the size of our workforce next year,” they said. McAllister and Conner noted that the 8% workforce cut in 2016 included a 10% reduction of executives and managers.
The 2017 cuts will be accomplished “through a combination of attrition, leaving open positions unfilled where appropriate, and offering a program in early 2017,” McAllister and Conner said, adding, “Where needed and in some circumstances, we may also need to use involuntary layoffs.”
Boeing Commercial Airplanes is currently “analyzing its 2017 budget and staffing plans,” they wrote to the employees. “The leaders of your respective organizations will share more information on staffing plans and the specific skills offering 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.”