Boeing Cuts Workforce Amid 777X Delays and Strikes

Boeing plans to reduce its workforce by approximately 10%, equating to about 17,000 jobs, as the company faces mounting losses and the ongoing machinist strike enters its fifth week. This reduction comes alongside significant delays in the launch of its new 777X wide-body aircraft, now pushed back to 2026 due to development challenges.

The manufacturer has not delivered the still-uncertified 777X, which is now six years behind schedule. In August, Boeing paused flight tests after discovering structural damage in one of the aircraft. Additionally, CEO Kelly Ortberg announced that production of the commercial 767 freighters would cease in 2027 after fulfilling existing orders.

“Our business is in a difficult position,” Ortberg stated in a staff memo. “Restoring our company requires tough decisions and structural changes to stay competitive and meet our customers’ needs.”

Boeing expects a loss of $9.97 per share in the third quarter, along with a $3 billion pretax charge in its commercial airplane unit and $2 billion for its defense sector. Preliminary results indicate an operating cash outflow of $1.3 billion for the quarter.

The ongoing machinist strike poses additional challenges for Ortberg. With over 30,000 machinists striking since September 13, credit ratings agencies have warned that Boeing risks losing its investment-grade rating. The strike has cost the company more than $1 billion monthly, prompting Boeing to file an unfair labor practice charge with the National Labor Relations Board, alleging bad faith negotiations by the machinists’ union.

The job cuts are the most drastic measures from Ortberg, who is focused on returning Boeing to stability following a series of safety and manufacturing crises.

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Sources: AirGuide Business airguide.info, bing.com, cnbc.com