By David Shepardson, Allison Lampert
WASHINGTON (Reuters) -Boeing said on Wednesday it is issuing layoff notices starting this week to workers impacted by a broader plan by the heavily indebted planemaker to cut 17,000 jobs, or 10% of its global workforce.
U.S. staff receiving the notices this week will stay on Boeing (NYSE:BA)'s payroll until January to comply with federal requirements that give workers 60 days' notice prior to ending their employment. News that Boeing would send out the Worker Adjustment and Retraining Notification (WARN) in mid-November was widely expected.
“As previously announced, we are adjusting our workforce levels to align with our financial reality and a more focused set of priorities," Boeing said in a statement. "We are committed to ensuring our employees have support during this challenging time."
The notices come as Boeing under new CEO Kelly Ortberg is trying to revive production of its strongest-selling 737 MAX, after a crippling weeks-long strike by more than 33,000 U.S. West Coast workers halted output of most of its commercial jets.
The MAX is a key revenue generator for the company which raised more than $24 billion in late October to shore up its shaky finances and protect its investment grade rating following concern from rating agencies.
Boeing has lurched from crisis to crisis this year, kicking off on Jan. 5 when a door panel blew off a 737 MAX jet in mid-air. Since then, its CEO departed, its production has slowed as regulators investigate its safety culture, and its largest union kicked off the strike on September 13.
The strike's end on November 5 and return of Boeing's workers this week to the company's Seattle-area assembly lines now support a slow revival of MAX production.
But the looming layoffs, combined with cuts to spending and travel have weighed on employee morale at the U.S. planemaker over the last few months, two sources familiar with the matter told Reuters. Many employees on Wednesday were still waiting for a phone call or Zoom (NASDAQ:ZM) meeting with a boss to learn if they would lose their jobs, said the sources who spoke on condition of anonymity because they weren't authorized to speak with media.