Boeing & Aerospace
Business
Boeing lays off more than 2,000 Washington workers
Nov. 18, 2024 at 9:28 am Updated Nov. 18, 2024 at 6:46 pm
A cargo door is installed on a 777 at the Boeing Everett Production Facility in June. Boeing has laid off 2,199 workers in Washington, according to a notice filed Monday with the state’s Employment Security Department. (Jennifer Buchanan / The Seattle Times)
By
Lauren Rosenblatt
Seattle Times business reporter
Boeing has laid off 2,199 workers in Washington, according to a notice filed Monday with the state’s Employment Security Department, as upheaval at the struggling aerospace giant continues to rattle local economies around the region.
The cuts — part of a companywide effort to reduce Boeing’s workforce by 10%, or 17,000 jobs — hit workers in 25 Washington cities, according to a copy of a notice that Boeing filed with the state.
Everett, where Boeing has the highest concentration of workers among its 66,000-person Washington labor force, saw the greatest number of layoffs. According to the notice, Boeing cut 1,160 people from its facilities in Everett, which employ roughly 35,000 workers.
Boeing also laid off 337 workers in Renton, where it employs roughly 13,000 people. The layoffs hit 235 people in Seattle, 148 in Tukwila, 136 in Auburn and 79 in Kent, among many other cities that saw a handful of job cuts.
The layoffs included engineers, human resources, IT, office administrators, and health and safety roles, among many job titles, according to the 27-page document listing each affected position.
“The Boeing Company has made the difficult decision to reduce its workforce,” Elizabeth French, a workplace specialist at Boeing, wrote in the company’s letter to the Washington Employment Security Department. “This decision is expected to result in the permanent layoff of approximately 2,199 employees at the Company’s Washington state locations.”
Managers began scheduling meetings and delivering pink slips over three days last week, starting on Wednesday. The cuts are far-reaching, hitting workers at Boeing facilities across the country, from Washington to Missouri to Arizona to South Carolina. They also appeared to impact workers in all three of Boeing’s divisions: commercial airplanes; defense, space and security; and global services.
The deep cuts, uncertainty about how the company chooses which roles to eliminate and concern that more layoffs will follow has already significantly eroded employee morale, workers told The Seattle Times.
One worker, who was laid off on Friday and asked to remain anonymous to avoid retaliation, described the scene at Boeing’s South Carolina campus as “like a funeral home.”
The worker, a process analyst, said it seemed the decision about who to cut was coming from levels much higher than his own managers, which left him concerned about what would happen if he and his co-workers weren’t there to fulfill their normal job responsibilities.
“It’s hard to work that hard for that long for a company, and then find out that somebody gave me a layoff (notice) and they don’t even know who I am,” said the worker, who has been at Boeing for 13 years. “They don’t know who I am, or what I do, or how many people I help to do their job.”
“There’s a lot of good talent that will be lost,” the worker said of conversations with other colleagues who are also cut.
Boeing CEO Kelly Ortberg announced the job cuts in October, part of a sweeping announcement that included changes to the company’s production plans and a sobering directive that the company must “reset our workforce levels to align with our financial reality.”
Boeing lost $6.2 billion in the third quarter this year, according to the most recent financial results, and risked a credit rating downgrade.
Ortberg’s announcement came as Boeing’s Puget Sound factories sat idle amid a strike by the company’s unionized Machinists workforce. But the job cuts were not a result of the eight-week strike, which ended earlier this month, Ortberg said on an October analysts call.
The layoffs were instead a result of overstaffing and targeted at reducing inefficiencies in the company, he continued.
The cuts were not expected to hit members of the Machinists union that returned to the factory this month. But the layoffs did impact Boeing’s professional aerospace union, which includes technicians and engineers.
The Society of Professional Engineering Employees in Aerospace, or SPEEA, said last week that 438 members had received layoff notices. The union has 17,000 members largely based in Washington, with some in Oregon, California and Utah.
Most employees who were notified of the layoffs will remain on payroll through mid-January, Boeing said last week.
The Worker Adjustment and Retraining Notification Act, or WARN, notice the company filed Monday listed Dec. 20 as the layoff start date. But, a spokesperson for the state said only a handful of workers will leave then and the majority will have a layoff start date of Jan. 17.
Laid-off employees will receive career transition services and subsidized health care benefits for up to three months, Boeing said. Workers will also receive severance pay, which will typically be one week of pay for every year of service.
The company is considering a second round of job cuts “if needed,” according to an internal slide deck shared with The Seattle Times. Those workers will be notified in December and remain on payroll through mid-February.
In Washington, the layoffs will have a “multiplier” effect on Boeing suppliers and other industries in the region, said Suzanne Dale Estey, the executive director of the trade group Washington Economic Development Association.
She expected to see blows to car sales, real estate, restaurants and health care organizations, though the exact impact will take time to show up as workers remain on payroll, apply for unemployment benefits and look for other jobs in the area.
“History shows us that there will be impacts to (Boeing’s) supply chain” and the aerospace industry in the region, she said. “I think it will take a while for all of that to unfold.”
The aerospace industry in Washington generated $71 billion in business revenues and supported 194,000 jobs last year, according to a study from the Seattle Metropolitan Chamber of Commerce and consulting firm Community Attributes.
Aerospace workers in Lynnwood and Everett spent $36.5 million on car sales, the equivalent of roughly 1,160 cars, the study found. In Auburn and Renton, aerospace workers directly supported 420 restaurant jobs and accounted for 2.4% of all restaurant sales. In Seattle and the Eastside, retail sales by aerospace workers reached nearly $270 million, which sustained 1 million square feet of retail space.
The study estimated Washington had 77,400 aerospace industry workers last year, including 66,000 at Boeing. It expected that number to grow to 81,800 based on industry growth in 2023, before Boeing’s tumultuous year that took a turn when a fuselage panel blew off a 737 MAX plane in January.
Echoing Ortberg’s sentiment last month, a Boeing spokesperson said Wednesday, on the first day layoff notices were delivered, “as previously announced, we are adjusting our workforce levels to align with our financial reality and a more focused set of priorities. We are committed to ensuring our employees have support during this challenging time.”
Dale Estey, of the Washington Economic Development Association, said the region is somewhat used to fluctuations in Boeing’s head count and aerospace employment generally. Because of that, other suppliers have started to diversify, allowing them to better weather changes at Boeing.
As an example, she pointed to one supplier in Renton that makes coils. They started making their coils for motorcycles as well, Dale Estey said, to bring in additional revenue.
“The fluctuations in the aerospace industry have been a norm for Washington state and the Seattle region, but we’ve always been able to endure,” she said. “We have a long-haul perspective on this and have the infrastructure, and the talent and incredible research institutions and the supply chain that will help us endure this.”
Though the recent Machinists strike strained Boeing’s finances, the company was already in a dire financial situation as it struggled to recover from two deadly crashes involving the 737 MAX plane in 2018 and 2019 and the COVID-19 pandemic.
That strain ratcheted up this year after a fuselage panel blew off a 737 MAX in January. Investigators have determined four bolts meant to hold the panel in place were missing after Boeing mechanics removed and reinstalled the panel for maintenance.
Since then, Boeing has slowed production as it focuses on quality and safety. The Federal Aviation Administration capped production of the 737 MAX at 38 planes per month, and Boeing has yet to reach that threshold.
“We know the financial situation of Boeing hasn’t gotten any better in the last few months, so these numbers were expected,” said Thomas Gilbert, a business professor at the University of Washington. “Boeing is going to try to control its finances every which way it can, and this does mean labor cost decreases.”
In other efforts to shore up its balance sheet, Boeing raised $21 billion in a stock sale in October and has considered shutting down or selling off other parts of its business to keep its focus on “areas that are core to who we are,” Ortberg said when announcing the cuts.
Gilbert, from UW, said layoffs, divestment and cost-cutting are a normal course for big businesses as they grow and add layers of middle management. He compared it to a household trying to save money; every Starbucks latte that they cut out would make a difference.
He was optimistic about Boeing’s future, pointing to its backlog of 5,400 commercial airplane orders.
“People want the product,” Gilbert said. “In some ways, Boeing is really lucky in that sense. It just needs to get its house in order.”
Lauren Rosenblatt: 206-464-2927 or lrosenblatt@seattletimes.com.
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