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Boeing will outsource more corporate jobs to India

Dominic Gates, The Seattle Times on

Published in Business News

Boeing told nonunion corporate staff in an all-hands virtual meeting this month that it will begin outsourcing finance and accounting jobs to Tata Consultancy Services of India.

Boeing said Tuesday that about 150 jobs nationwide will be cut in the first batch of layoffs, with more to come next year and thereafter. The first layoff notices will go out in October.

“The Finance team is planning for lower staffing levels as it simplifies processes, improves efficiency and shares select work with an outside partner,” Boeing said in a statement, adding that it “will assess future impacts as the process continues in the coming years.”

“It was kind of a shock the way they rolled it out,” said one senior Boeing finance employee, who asked for anonymity to retain his job. “They had the all-hands enterprise meeting and then four days later everyone was moved into new organizations with new managers.”

Boeing’s finance group pre-pandemic consisted of about 6,000 employees companywide, according to the company. At least 1,000 are in the Puget Sound region, the finance employee said.

The announcement has left many people hanging, wondering if their jobs will be among those cut but not knowing for sure.

“We’re trying to strike a balance, being as transparent as we can without getting ahead of the work that we still have to do,” a Boeing spokesman said. “We’ve been frank with employees that we do expect lower staffing levels within finance. As soon as we know the details, we’ll share those.”

This week, Tata managers began directly consulting with Boeing finance and accounting managers to identify the precise work statement the Indian company will take over. Once that’s pinned down, Boeing will notify the individuals who are to be laid off, including some management employees.

Before their departure, those employees will be asked to train the Tata personnel in Boeing procedures to smooth the handover of the work.

Transformation = downsizing

The planned layoffs are part of a broad and concerted Boeing effort in recent years to cut nonunion corporate jobs.

“Several of our corporate functions, including Information Technology and Finance, have implemented changes to streamline their operations, resulting in lower staffing levels” in those areas, Boeing said Tuesday.

That push began with moves to get rid of IT work that could be done more cheaply elsewhere and was not seen as central to Boeing’s business.

In 2013, Boeing began cutting 1,500 IT positions in the Puget Sound region. Last year, it outsourced to Dell another batch of IT work, eliminating 600 jobs across the company.

Several years ago Boeing outsourced a range of low-level finance work to Genpact, a multinational company founded in India and with a large presence in that country.

According to the senior Boeing finance employee, Tata will take over some of the Genpact work, though Genpact will continue to do some other work for Boeing.

Boeing’s new Chief Financial Officer Brian West, who joined the company in August last year, has intensified the focus on cutting financial and accounting jobs.

In November, he appointed Amy Rodrigues to lead the finance and accounting team, with a telling extension to her title: vice president of finance and finance transformation.

 

Boeing corporate refers to the transformation as streamlining. To the affected employees, it’s simply downsizing.

The downsizing comes as Boeing is scrambling in a tight labor market to hire mechanics to build planes and engineers to design them after a severe round of front-line job cuts during the global pandemic.

Boeing cut just over 20,000 jobs in 2020 companywide — 15,000 of those in Washington state — as the pandemic hit its commercial airplane business hard.

Last year, it cut a further 1,000 jobs in Washington state.

This year, as air travel demand returned and Boeing started to ramp up 737 MAX production in Renton and poured engineering resources into fixing the problems on the 787 and various defense projects, the company finally began rehiring and adding back jobs, mostly in engineering and manufacturing.

Taking the sting out of the relatively small number of white-collar layoffs ahead in finance, Boeing said Tuesday it has “significantly increased hiring in engineering and manufacturing as market demand increases and we drive stability in production and invest in engineering and innovation.”

“Overall, we have expanded the Boeing workforce by about 10,000 employees this year,” Boeing said.

That still leaves Boeing down about 10,000 jobs relative to the workforce it had pre-pandemic.

Boeing in India

Boeing now has about 3,500 direct employees in India.

The Boeing India Engineering & Technology Center in Bengaluru and Chennai undertakes complex advanced aerospace engineering work. Boeing has invested more than $200 million in the Bengalaru campus, its largest investment outside the United States.

The company has plans to develop an avionics manufacturing and assembly facility there — replacing an in-house capability that Boeing abandoned in 2003 and has been attempting to recreate since 2017.

Facing a shortage of engineers in the United States, and with its major engineering center in Moscow closed since the Russian invasion of Ukraine, Boeing sees India as a key supplier of engineering talent.

Another 7,000 people in India are employed at Boeing’s suppliers, including the multinational conglomerate Tata Group, headquartered in Mumbai.

Boeing this year named Tata Aerospace & Defense, India’s largest private aerospace manufacturer, a “2022 Supplier of the Year.”

That Tata division makes aircraft landing gear doors, vertical fins, floor beams, underwing and overwing panels, fuselages, secondary structures, and tail cones. A joint venture with Tata Group also produces AH-64 Apache helicopter fuselages in Hyderabad for military customers around the globe.

Tata Consultancy Services, the Tata Group subsidiary taking over the Boeing finance jobs, is a major IT and financial services consulting company with about 600,000 employees worldwide. Its market capitalization stands at $140 billion, 60% larger than Boeing’s.

©2022 The Seattle Times. Visit seattletimes.com. Distributed by Tribune Content Agency, LLC.

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