Boeing's struggles lead to calls for breakup and stock boost

In the United States, Boeing has undertaken significant layoffs as part of a larger strategy to address its financial challenges. Following an announcement in early October 2023, the aerospace giant has laid off hundreds of workers in Washington state and California, contributing to an overall reduction of approximately 17,000 jobs from its workforce. Specifically, nearly 400 employees were laid off in Washington, while more than 500 experienced job cuts in California. This choice stems from ongoing troubles faced by the company, including financial distress and regulatory setbacks. Additionally, a labor strike lasting almost two months was highlighted as a context for the layoffs but was stated by CEO Kelly Ortberg not to be the direct cause of the dismissals. The layoffs, which began in November 2023, affected various roles including engineers, recruiters, and analysts across Boeing's commercial, defense, and global services sectors. Despite the significant reductions, Boeing has committed to providing severance packages, career transition services, and subsidized health benefits to those laid off, with most remaining on payroll for approximately two months post-layoff. This restructuring effort is characterized by Boeing’s aim to realign its workforce with what they term better financial realities and a focused set of priorities, which unfortunately reflects the severity of the current situation the company faces. Boeing's difficulties extend beyond layoffs, as the company has encountered growing turmoil regarding its market standing and investor confidence. Serious concerns have arisen following several manufacturing delays, disputes, and safety issues, which collectively have threatened the company's reputation built over decades. Recent data indicates that Boeing's stock has declined by 43% year-to-date, which illustrates market skepticism surrounding its recovery capability. This severe downturn has led some internal stakeholders, including senior managers, to advocate for a restructuring of the company itself, suggesting a break-up may be necessary to enhance efficiency and operational focus. The concept of separation has been gaining traction within aerospace and industrial sectors and is reflected through a growing acknowledgment that Boeing's existing structure may inhibit optimal market performance. Analysts, including those from the Edge Consulting Group, have proposed that a break-up could yield a 100% increase in stock value, driving home the point that organizational changes may be central to restoring investor confidence. If implemented, such structural reform could allow Boeing's different divisions—commercial aviation, defense, and services—to operate independently, catering to each sector's specific demands and potentially fostering future growth, emphasizing the urgency for Boeing's management to act.