Boeing Puts Hiring On Hold, Considering Layoffs As Workers' Strike Lands Airline In 'Difficult Position'

The strike started after workers denied the company’s proposed wage hike of 25 per cent over the period of four years. Comparatively, the demand was made for an increase of 40 per cent

Boeing on Monday said that it is putting a hold on recruitment and considering temporary layoffs as the airline tries makes efforts to save cash amidst the ongoing strike by factory workers. The carrier issued a memo to the employees and informed that it is pausing hiring, cutting down travel, and contemplating job cuts.

The strike by the factory workers began last week, reported Mint. In light of the same, the airline in its memo said that it is adopting these measures as ‘our business is in a difficult period’, the report noted citing AP.

Workers On Strike

The strike started after workers denied the company’s proposed wage hike of 25 per cent over the period of four years. Comparatively, the demand was made for an increase of 40 per cent. The strike involves nearly 33,000 workers who are represented by the International Association of Machinists and Aerospace Workers.

In response to the strike, the airline said it will also reduce spending on suppliers. Brian West, Chief Financial Officer, informed about 10 immediate measures the carrier plans to adopt to cut down on costs. These include stopping hiring at all levels, putting a pause on salary hikes for managers and executives, and suspending all non-critical travel.

“We are also considering the difficult step of temporary furloughs for many employees, managers, and executives in the coming weeks,” the executive noted.

Boeing's Financial Crisis

Notably, Boeing has been facing financial difficulties as the firm has reported more than $25 billion in losses since 2019. In the second quarter of 2024 itself, the company burned through $4.3 billion. West noted that the current strike is posing a serious hazard to the firm’s recovery. Delay in delivery of new aircraft has resulted in adding more pressure on the airline.

Meanwhile, the workers have pointed out that they have suffered through loss of bonuses, pensions, and other benefits and rejected the airline’s offer as a result. The negotiations between the carrier and the union are scheduled to resume on Tuesday with federal mediators.