Boeing announced on Monday that it is halting recruitment and considering temporary layoffs as part of its efforts to conserve cash during the ongoing factory worker strike. In a memo to employees, the company revealed that it is pausing hiring, cutting back on travel, and contemplating potential job cuts. These measures come in response to the strike that has significantly impacted the company’s operations.
The strike, which began last week, was initiated after factory workers rejected Boeing's proposed wage increase of 25% over four years. The workers, represented by the International Association of Machinists and Aerospace Workers, are demanding a 40% pay raise instead. The strike has drawn participation from around 33,000 workers, adding pressure to Boeing’s already strained financial situation.
Cost-Cutting Measures Announced
In response to the strike, Boeing plans to reduce spending on suppliers and implement a range of cost-cutting measures. Chief Financial Officer Brian West outlined 10 immediate actions the company is taking, including freezing hiring at all levels, halting salary increases for managers and executives, and suspending non-essential travel. West also noted that the company is considering temporary furloughs for employees, managers, and executives in the coming weeks.
Boeing's Financial Struggles
Boeing has been facing significant financial challenges, reporting over $25 billion in losses since 2019. In the second quarter of 2024 alone, the company burned through $4.3 billion. West emphasized that the ongoing strike is a serious threat to the company's recovery efforts, particularly as delays in aircraft deliveries continue to strain the airline’s finances.
Amid the strike, workers have voiced concerns over the loss of bonuses, pensions, and other benefits, which led them to reject Boeing’s wage offer. Negotiations between Boeing and the union are set to resume on Tuesday, with federal mediators expected to participate in the discussions. Both parties are aiming to reach an agreement to end the strike and resume normal operations.
With inputs from agencies
Image Source: Multiple agencies
© Copyright 2024. All Rights Reserved Powered by Vygr Media.
