Boeing has announced plans to reduce its workforce by 10%, which means the aerospace giant will cut 17,000 employees off, per CEO Kelly Ortberg’s letter.
This decision comes amid a prolonged machinist strike, which has halted production at its aircraft factories for five weeks, and as losses continue to mount for the aerospace giant.
“We reset our workforce levels to align with our financial reality and to a more focused set of priorities. Over the coming months, we are planning to reduce the size of our total workforce by roughly 10 per cent. These reductions will include executives, managers and employees,” Ortberg’s letter read.
Alongside the job cuts, Boeing will also delay the launch of its long-awaited 777X wide-body aeroplane. The delivery of the 777X, which is still awaiting certification, has now been pushed to 2026—putting the project six years behind its original schedule. Boeing paused flight tests for the aircraft in August after discovering structural damage in one of the planes.
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Plus, the company announced plans to stop manufacturing its commercial 767 freighters in 2027, once it fulfills its current orders. “Our business is in a difficult position, and it is hard to overstate the challenges we face together,” Ortberg said.
“Beyond navigating our current environment, restoring our company requires tough decisions and we will have to make structural changes to ensure we can stay competitive and deliver for our customers over the long term.”
Boeing expects $1.3 billion loss in third quarter
Boeing anticipates reporting a significant third-quarter loss of $9.97 per share, with a pretax charge of $3 billion in its commercial airplane unit and another $2 billion in its defense business. The company also expects to see an operating cash outflow of $1.3 billion for the third quarter, according to preliminary financial results.
Ortberg faces the daunting task of stabilizing Boeing after a series of safety and manufacturing issues, including a recent near-catastrophic midair door-plug blowout earlier this year.
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The ongoing machinist strike adds further strain. Credit ratings agencies have raised concerns that Boeing may lose its investment-grade status due to the financial pressure from the strike, which involves more than 30,000 machinists and began on September 13. The company has been losing over $1 billion each month since the strike began, according to a recent report by S&P Global Ratings.
“While our business is facing near-term challenges, we are making important strategic decisions for our future and have a clear view on the work we must do to restore our company,” he stated.
