Boeing layoff plan suggests deep white-collar job cuts

The major Boeing layoffs announced last week will all be involuntary, meaning the company will not offer severance packages to encourage workers to leave voluntarily.

And according to the “reduction in force” plan presented to Boeing Commercial Airplane managers Monday, members of the machinists union will not be among the 10% of Boeing workers being laid off, for now.

It is illegal to lay off workers on strike.

While machinist layoffs may come later, that means the initial cuts will be among white-collar workers, including engineers, and non-union salaried employees at all levels up to vice president.

Slides from an internal presentation on “power cuts” obtained by The Seattle Times reveal the criteria used to select individuals and work groups to cut.

A timeline presented shows the two phases of planned layoffs.

Managers are expected to finalize their decision on who will be laid off later this month. Then, after an oversight and compliance review, between Nov. 13 and Nov. 15, they will issue the first wave of 60-day layoff notices to affected employees whose jobs will end on Jan. 17.

The second phase, to achieve the targeted 10% head-count cut “if necessary”, will see further layoffs on February 21.

In response to questions about the plan, Boeing said those affected would only have to work for a few weeks after being notified of their impending layoffs.

They will continue to be paid until their layoff date, giving them some time — interrupted by the Thanksgiving and Christmas holidays — to find other work.

Boeing said the company is “in the early stages of putting it together” and that the dates mentioned in Monday's presentation could change within a day or two.

The targeted cuts represent about 17,000 people across the company

Boeing said the 10% reduction plan could be handled differently in other business units, including the Defense and Space Division, Global Services Division and headquarters employees.

Who will be tapped for layoffs?

The slides indicate that commercial airline leaders will use multiple criteria to identify individuals or units for layoffs. They are directed to consider all levels of employees including executives and managers.

For other companies the normal losses resulting from employees leaving or retiring will be calculated towards reduction.

Retrenchment of non-employee contractors will count towards the main calculation target. But managers were instructed not to count special contractors whose employment was already time-limited.

For direct employees, poor performance is the first filter on the list. “Lower performers” may be let go. Later higher costs including overhead costs for individuals or work units.

Managers are asked to identify “tasks we can prioritize and stop doing”. And they should consider which skills are essential for retention and which are not.

So roles that are no longer deemed necessary provide another means of reaching the retrenchment goal.

The list of criteria states that managers must consider whether an individual's work spans multiple levels of the commercial airline. Asked what that means, Boeing said leaders are being asked to consider the company's reporting structure when making layoff decisions, with the goal of making it “flatter and more efficient.”

In addition, managers are asked to consider the “back to office” push. Whether an employee is working remotely or in person may be a factor in the decision.

Mechanics are safe for now

Production and maintenance workers at Boeing South Carolina are not included in the plan. Likewise excluded are members of Machinists Union District 751 and Portland, Ore., Machinists Unit, District W24 – though this slide adds parenthetically, “at this time.”

Excluding machinists from layoffs for the time being is a legal requirement.

Still, their strike has little to do with the need for layoffs. It's a restructuring by new CEO Kelly Ortberg designed to address Boeing's larger and deeper problems.

Since the Alaska Airlines fuselage panel explosion in January, Boeing has been in dire straits, hemorrhaging cash. The rate of jet production slowed to a crawl as Boeing sought to convince the Federal Aviation Administration that it had gained control of quality management inside the factory.

The only way forward for Boeing is to start building planes again and increase production at the rate planned before the January blowout. To achieve these rates, it is hiring machinists at a rapid clip. Whenever the strike is over, those machinists who are ready to work will be needed.

However, there is no such assurance for engineers in the Reduction in Force Plan. Even in South Carolina, only manufacturing jobs are expressly excluded from layoffs.

The temporary exclusion of 33,000 machinists from the planned cuts means Boeing can only reach the 10% target outlined in the Commercial Aircraft Unit slide through deep cuts among white-collar workers, including engineers and non-union salaried employees.

In the past, when Boeing needed to cut jobs, for example during the 2008 global financial crisis and then during the industry downturn caused by the Covid-19 pandemic, it softened the impact by offering severance packages to those willing to leave.

Not this time. “There will be no voluntary layoffs,” the plan states. Perhaps that's because in the current dire financial climate, Boeing can't afford such temptations.

The only softening in the commercial aviation plan is to allow those who have been laid off to stop working and still be paid until the official layoff date.

Boeing workers will now have to wait more than four weeks to learn their fate, creating immense uncertainty and anxiety.