What is a furlough? Boeing CFO hints at possible WA layoffs

Boeing announces hiring freeze as strike continues

Boeing announced a hiring freeze as it deals with the ongoing strike, affecting several factories in western Washington.

WASHINGTON - In a memo sent to employees Monday, Boeing CFO Brian West hinted at the possibility of furloughs for Washington workers, managers and executives as the company navigates a challenging period due to an ongoing strike by IAM 751 and W24 union members.

The memo outlined several cost-saving measures Boeing is implementing to safeguard its future, including hiring freezes, travel cuts and reduced supplier expenditures on the 737, 767 and 777 programs. However, the most concerning potential measure for many employees is the mention of furloughs, a temporary layoff that could impact a significant number of workers across the company.

Keep reading to learn more about the furloughs and how they could impact many Washington Boeing workers.

So, what exactly is a furlough?

A furlough is a temporary, unpaid leave of absence initiated by an employer, often during times of financial strain, reduced business activity or external disruptions — such as labor strikes or economic downturns.

During a furlough, employees are typically not paid but may retain their benefits like health insurance. Unlike layoffs, furloughs are temporary, with employees expected to return to work once the company stabilizes.

In Boeing's case, the strike by its unionized workforce has significantly disrupted operations, especially in critical programs.

According to West, "this strike jeopardizes our recovery in a significant way." He added that the company is making efforts to work with the union to reach a new contract agreement that would allow normal operations to resume. But as the strike drags on, Boeing faces increasing financial strain, prompting the need for drastic cost-cutting measures, including the possibility of temporary furloughs.

How does a furlough differ from a layoff?

Unlike layoffs, which are permanent terminations of employment, furloughs are temporary. The idea is that furloughed employees will be brought back once the financial or operational challenges subside. Furloughed employees often retain their healthcare benefits and can collect unemployment benefits during the furlough period, though they are not guaranteed income from their employer.

Boeing's cost-cutting measures

The memo detailed several other immediate actions Boeing is taking to conserve cash, such as suspending non-essential capital expenditures, pausing hiring and pay increases, and cutting travel and consultant spending. However, the potential furloughs would likely have the most significant impact on Boeing’s workforce.

Future uncertainty at Boeing

West acknowledged the uncertainty this situation creates.

"I know that these actions will create some uncertainty and concern, as well as many questions," he said in the memo.

Boeing plans to provide further updates in the coming days, but employees now face the looming possibility of being temporarily furloughed as the company continues to grapple with the effects of the ongoing strike.

These potential furloughs are an indication of how severe the impact of the IAM union strike has become, with employees across multiple levels of the company now bracing for temporary layoffs.

As the situation evolves, Boeing employees will be looking for more detailed guidance on what comes next.