Boeing Announces Significant Job Cuts Amid Financial Reevaluation
The aerospace titan Boeing, under the direction of newly appointed CEO Kelly Ortberg, declared on Friday a plan to eliminate about 10% of its workforce in the upcoming months. This announcement highlighted the company’s extensive investment in stock buybacks over the past several years.
Boeing, which is currently dealing with a machinist strike, has reportedly allocated approximately $68 billion towards stock repurchases and dividends from 2010 to 2019—expenditures that critics argue contradict the firm’s assertions that layoffs and poor worker compensation are necessities.
Les Leopold, the executive director of the Labor Institute and the author of Wall Street’s War on Workers: How Mass Layoffs and Greed Are Destroying the Working Class and What to Do about It, expressed to Common Dreams via email that “Boeing has morphed into a company focused on stock buybacks, rather than solely on manufacturing aircraft.”
“The typical corporate response is always to cut jobs,” Leopold further stated. “There is a direct connection between stock buybacks and layoffs. It’s high time these practices were completely banned.”
Leopold has also called on Vice President Kamala Harris, the Democratic presidential candidate, to make a commitment that “no government funds should support companies that lay off workers and engage in stock buybacks.” In 2022, Boeing secured close to $15 billion in contracts from the Pentagon.
“CEO Ortberg has a chance to adopt a different approach rather than resorting to the usual aggressive labor strategies designed to intimidate and suppress opposition,” Leopold noted.
Ortberg assumed the role of Boeing’s CEO in August following the resignation of the previous CEO, who left with a $45 million severance package amid new safety issues when a door plug was ejected from a Boeing aircraft during flight.
In a memo to employees on Friday, Ortberg, who is poised to earn $22 million in total compensation next year, announced that Boeing will postpone its new 777X jet and cease production of its 767 freighters. Ortberg also mentioned that the company needs to “reset our workforce levels to reflect our current financial situation and concentrate on a smaller set of priorities”—which translates to significant layoffs.
“These cuts will affect executives, managers, and employees alike,” the CEO explained. “We understand these decisions will cause hardships for you, your families, and our team, and I truly wish we could avoid making them. Nonetheless, our business conditions and future recovery necessitate these tough decisions.”
The impending layoffs are expected to impact around 17,000 employees.
Ortberg’s announcement followed shortly after Boeing halted contract talks with the striking machinists, criticizing the union’s requests as “exceedingly beyond what is acceptable for our continued competitiveness.”
“This is the same company that dedicated $68 billion to dividends and stock buybacks over the past decade and provided its last two CEOs with multimillion-dollar exit packages,” former U.S. Labor Secretary Robert Reich commented. “What truly is unreasonable is Boeing’s greed.”
Jon Holden, president of District 751 of the International Association of Machinists and Aerospace Workers, which represents the striking Boeing employees, declared on Friday that the company’s leadership “continues to walk away from negotiations” and “employs the same worn-out tactics of negotiating through the media.”
“The solution to this strike must start at the negotiation table,” Holden stated. “Avoiding negotiations only prolongs the strike. CEO Ortberg has an opportunity to handle things differently, rather than using the same old labor threats designed to frighten and overwhelm anyone who challenges them.”
“Our members are too strong for that and are standing firm on their principles,” Holden continued. “In the end, it is our members who will decide whether any negotiated contract offer is acceptable. They seek a resolution that is bargained and meets their needs. It’s time to return to the negotiation table.”
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