Boeing freezes hiring and mulls temporary layoffs, citing machinists' strike

33,000 Boeing workers striking for higher wages

Boeing is freezing hiring across the company, citing a strike launched on Friday by 33,000 machinists at the airplane manufacturer that it said "jeopardizes" its business. 

Boeing is also pausing all pay raises and promotions, halting non-essential business travel, and taking other steps to cut costs, the aviation giant said Monday as the ongoing strike begins taking a financial toll. Other belt-tightening measures include eliminating corporate first- and business-class travel, as well as pausing spending on outside consultants, charitable contributions, and advertising and marketing. 

The measures are aimed at preserving cash and safeguarding the company's future, Boeing Chief Financial Officer Brian West said in a memo shared with employees. Boeing underlined that it will not reduce funding in areas that support safety, quality and direct customer support work.  

"This strike jeopardizes our recovery in a significant way, and we must take necessary actions to preserve cash and safeguard our shared future," West wrote, noting the company's negotiations with the two unions representing workers. "Importantly, we will protect all funding for safety, quality and direct customer support work."

West also said Boeing is considering temporarily furloughing "many" employees, managers and executives in the coming weeks, without specifying a number of potential layoffs. The company is expected to share more details on its plan in the coming days. 

Why Boeing factory workers are on strike

The International Association of Machinists and Aerospace Workers has been on strike since last week after voting to reject Boeing's latest contract offer. The proposed deal would boost worker wages by 25% over four years and lift machinists' salaries at the company from $75,608 per year on average, not counting overtime, to $106,350 by the end of the contract, according to Boeing.

The striking assembly workers build the 737 Max, Boeing's best-selling jetliner, along with the 777 commercial jet and 767 cargo plane at factories in Renton and Everett, Washington. The company is expected to halt the manufacturing the aircraft if the strike continues. Boeing 787 Dreamliners are built by nonunion workers in South Carolina.

Boeing already faced financial setbacks and reputational damage before the strike. It has lost more than $25 billion since the beginning of 2019 after facing a range of manufacturing issues and coming under investigation by federal regulators this year. 

—With reporting from the Associated Press

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