Boeing plans buyouts, layoffs for engineers in first of three cuts for 2017

SEATTLE – Boeing announced internally on Tuesday a new round of employee buyouts for engineers company-wide and warned that layoff notices will follow later this month to engineers in Washington state, where the company has a large presence.

Management did not cite a target for the number of projected job cuts.

The news comes after company Vice Chairman Ray Conner and the new chief executive of Boeing Commercial Airplanes, or BCA, Kevin McAllister, warned in December of the need to drive for further cuts in 2017.

John Hamilton, BCA vice president of engineering, sent a memo on the job cuts shortly after noon to all BCA engineering employees, managers and executives.

“As we enter 2017, our plan calls for us to reduce our Engineering staff,” Hamilton told employees. “I realize some of this news is unpleasant. But I wanted to respect your right to know what is occurring this year.”

Boeing spokesman Doug Alder said similar announcements will be coming for other work groups, such as production workers, as plans are finalized.

“We’ll be notifying employees as different areas and functions within BCA finalize their plans,” Alder said.

Hamilton’s memo states that details of a buyout offer will be sent on Friday to engineering employees in eligible skill classifications. Those who accept the offered buyout will end their employment on April 21.

The buyout package will be offered to employees in Washington state, southern California and South Carolina.

Hamilton’s message went on to say that 60-day involuntary layoff notices affecting only engineering employees in Washington will be sent out on Jan. 20, with layoffs effective March 24.

Those layoffs will affect employees in the skill classifications that were offered a buyout package last year, he said.

This year’s buyout offer is going out mostly to employees in different skill classifications. There will be further involuntary layoffs if not enough people accept the offer and it falls short of Boeing’s cost-saving target.

Hamilton said that there will be two additional rounds of buyouts and layoffs in engineering later this year.

The extent of the follow-on job cuts “will be driven by our business environment and the amount of voluntary attrition,” he said.

“We continue to operate in an environment characterized by fewer sales opportunities and tough competition,” Hamilton said. “The decision to lower the production rate on the 777 program announced in late-December underscores that environment and what we need to do to help Boeing win.”

Boeing spokesman Alder said the workforce reductions in 2017, as last year, will be achieved where possible through attrition and voluntary buyouts before involuntary layoffs.

He said the company will also “aggressively reduce overall spending in 2017 in non-labor areas.”

Ray Goforth, executive director of Boeing’s white-collar engineering union – the Society of Professional Engineering Employees in Aerospace, or SPEEA – said the process Boeing is following in cutting jobs was worked out in discussions with the union that led to last year’s surprise agreement to a new six-year SPEEA contract.

“This is all stuff we negotiated into that contract,” Goforth said. “We knew the company was going to lay off significant numbers of people. We wanted to make it as painless as possible.”

He said that of the jobs cuts through the end of November, 70 percent were voluntary.

Last year, a combination of leaving open positions unfilled, buyouts and forced layoffs slashed the Boeing workforce in Washington state by 7,357 jobs – a 9.3 percent reduction overall.