Photographer: Ron Wurzer/Bloomberg

Boeing to Dismiss Hundreds of Engineers Amid Sales Slowdown

  • Record order backlogs and surplus older models hurt demand
  • Planemaker says additional cuts may be on horizon in 2017

Boeing Co. plans to lay off hundreds of engineers in Washington state and other locations -- and may eliminate more jobs later this year as the planemaker contends with slowing aircraft sales.

The manufacturer plans to hand out pink slips on Friday, the same day that 305 engineers and technical workers will leave voluntarily under an earlier buyout offer. Boeing has pared 1,332 of the jobs from its Seattle-area manufacturing center since the start of 2016, according to SPEEA, the union representing the workers.

Boeing may make additional engineering cuts depending on “our business environment and the amount of voluntary attrition,” John Hamilton, vice president of engineering for the commercial airplanes unit, said in a letter to employees Monday. The dismissals are needed to “meet our operating plan and additional challenges in the marketplace.”

The Chicago-based company, which emerged as the face of U.S. manufacturing under President Donald Trump, has been winnowing employment for more than a year as a record jetliner sales spree fades. Boeing trimmed the Washington workforce by 9 percent to 70,640 employees over the past year. The company’s total headcount has shrunk 7.6 percent to 146,962 since March 2016.

Revenue Drop

Total revenue for 2016 dipped 1.6 percent to $94.6 billion as Boeing slowed output of the 747 jumbo jetliner amid declining sales and said it would reduce the production rate of the 777 twin-aisle plane for a second time. As demand for new planes has waned amid record order backlogs and a surplus older models, Boeing has trimmed its overhead and worked to ratchet down supplier costs.

The latest workforce reduction, which should take effect June 23, follows a separate exodus of 1,500 mechanics who agreed to leave voluntarily earlier this year. Both union and non-union engineering workers will be included, Doug Alder, a Boeing spokesman, said Monday. He wouldn’t say where the job cuts would occur.

Union leaders are seeking details on the plants and positions affected by the latest cutback. “We’ve also asked Boeing to expand the voluntary layoff program and provide other assistance to employees,” Rich Plunkett, SPEEA’s director of strategic development, said in a statement.

Some unionized workers may be eligible to be recalled at a future date.

Shares of the largest U.S. exporter rose 1.9 percent to $179.02 at the close in New York. The trading gain was the largest among the 30 members of the Dow Jones Industrial Average.

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