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More Boeing job cuts on the way, company says

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SEATTLE — Boeing officials said Monday the company will need to continue reducing the size of its workforce next year to remain competitive in the industry.

In a message sent to Boeing Commercial Airplanes employees, leaders said by the end of this year commercial airline staff will have been cut by 8-percent, including a 10-percent reduction of executives and managers.

“The recent 777 rate-reduction announcement is the latest sign that the market is signaling near-term hesitation for twin-aisle aircraft in certain regions. But it also illustrates the dynamic business climate in which we currently operate; an environment characterized by fewer sales opportunities and tough competition.”

Officials said the company is planning a voluntary layoff program but would not rule out involuntary layoffs as a possibility.

“The leaders of your respective organizations will share more information on staffing plans and the specific skills offering VLOs or other employment actions soon. We believe it is important to let you know the situation up front so you are aware as you make plans and decisions for the coming year.”

Here is the full message sent to Boeing Commercial Airplanes employees by Boeing Vice Chairman Ray Conner and Boeing Commercial Airplanes President & CEO Kevin McAllister.

“Earlier this year, we committed to competiveness initiatives to better position Boeing Commercial Airplanes in the marketplace. We believe it is important to be accountable to you concerning the 2016 results, and to let you know we will continue these efforts in 2017 so we remain the true industry leader next year and in the future.

The recent 777 rate-reduction announcement is the latest sign that the market is signaling near-term hesitation for twin-aisle aircraft in certain regions. But it also illustrates the dynamic business climate in which we currently operate; an environment characterized by fewer sales opportunities and tough competition.

We continue to follow our plan announced earlier this year to make fundamental changes to win in the market, fund our growth and operate as a healthy business. Teams across Commercial Airplanes have been focusing on the Keys to Winning to improve first-time quality, productivity and safety, and reduce waste. We reduced total employment this year mostly through attrition, not backfilling open positions, and voluntary layoffs (VLOs). We achieved further supply chain savings, sought ways to more efficiently manage use of our facilities and cut discretionary spending, including travel and other non-production costs.

While we have made progress in reducing costs and improving affordability, we will need to do more in 2017. This means we will continue working aggressively across BCA to reduce non-labor costs.

It also means we will need to continue to reduce the size of our workforce next year. By the end of this year, we anticipate a reduction of 8 percent in total BCA employment since January. This includes a 10-percent reduction of executives and managers. In 2017, we will continue to focus efforts on matching employment levels to business and market requirements. 

Once again, we will accomplish these reductions through a combination of attrition, leaving open positions unfilled where appropriate, and offering a VLO program in early 2017. Where needed and in some circumstances, we may also need to use involuntary layoffs.

Right now, each BCA organization is analyzing its 2017 budget and staffing plans. The leaders of your respective organizations will share more information on staffing plans and the specific skills offering VLOs or other employment actions soon. We believe it is important to let you know the situation up front so you are aware as you make plans and decisions for the coming year.

Our product lineup is the best in the industry and we have achieved a healthy backlog that currently sustains us. There are tremendous opportunities ahead. But to successfully compete and win new orders that will fund future product development and growth requires us to achieve much better performance. Continuing the actions to fundamentally improve our overall competitiveness will ensure our future leadership in the marketplace.”