Boeing has announced plans to cut around 10% of its workforce—approximately 17,000 employees—over the coming months as the company faces mounting financial losses and ongoing production disruptions caused by a machinists’ strike. The layoffs will affect executives, managers, and employees across the company’s global operations, according to a memo sent by new CEO Kelly Ortberg on Friday.
With 170,000 employees worldwide, many of them based in manufacturing facilities in Washington and South Carolina, Boeing had already implemented rolling temporary furloughs. However, Ortberg stated that these furloughs will be halted in light of the upcoming layoffs.
As part of its restructuring efforts, Boeing has also delayed the rollout of its new 777X aircraft to 2026, a year later than originally planned. In addition, the company will cease production of the cargo version of its 767 jet in 2027 once existing orders are fulfilled.
Boeing has been struggling financially, losing more than $25 billion since 2019. The situation has been exacerbated by a strike involving 33,000 union machinists, who have been on strike since September 14, disrupting production of Boeing’s popular 737 Max, 777, and 767 models. Talks between Boeing and the International Association of Machinists and Aerospace Workers have so far failed to resolve the dispute, with Boeing filing an unfair labor practices charge against the union.
In tandem with the layoff announcement, Boeing provided a preliminary update on its third-quarter financial results, revealing further grim news. The company burned through $1.3 billion in cash during the quarter and posted a staggering loss of $9.97 per share. This loss far exceeded industry expectations, which had forecast a smaller per-share loss of $1.61. Boeing attributed the larger-than-expected loss to significant write-downs, including $2.6 billion in charges related to delays in the 777X program, $400 million tied to the 767, and $2 billion for setbacks in defense and space projects, including new Air Force One jets and a NASA space capsule.
As of September 30, Boeing reported $10.5 billion in cash and marketable securities. Full third-quarter earnings will be disclosed on October 23.
The strike has contributed significantly to Boeing’s financial troubles, as the company typically receives half or more of an aircraft’s payment upon delivery to customers. With production of the 737 Max, 777, and 767 halted due to the strike, Boeing’s cash flow has been severely impacted. The company continues to produce 787 models at a nonunion facility in South Carolina.
“Our business is in a difficult position, and it is hard to overstate the challenges we face together,” CEO Ortberg said in his message to employees. He emphasized the need for “structural changes” to keep Boeing competitive and meet customer demands in the long term.
Ortberg, who took over in August as Boeing’s third CEO in less than five years, is navigating numerous challenges as he seeks to turn the company around. Boeing has faced increasing regulatory scrutiny from the Federal Aviation Administration (FAA) following multiple incidents, including a panel failure on a 737 Max earlier this year. Additionally, the company recently agreed to plead guilty to conspiracy charges related to the 737 Max’s certification process and pay a fine.
Further compounding Boeing’s difficulties, NASA recently determined that the company’s spacecraft was not safe enough to bring two astronauts back from the International Space Station, drawing attention to ongoing issues within the aerospace giant.
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