Boeing is set to eliminate 17,000 positions, which represents 10% of its workforce, as the company navigates various challenges within its operations.
In an email to employees on Friday, CEO Kelly Ortberg announced that the layoffs will encompass executives, managers, and staff. He emphasized that the workforce reduction is crucial to “align with our financial reality,” particularly following an ongoing strike involving 33,000 workers on the West Coast, which has halted production of the 737 MAX, 767, and 777 jets.
Additionally, Boeing will postpone the launch of the new 777X aircraft to 2026, shifting it back from the original 2025 schedule, and will cease production of the cargo variant of the 767 jet in 2027, following the completion of current orders.
“Despite the near-term challenges our business is facing, we are making vital strategic decisions for our future and have a clear understanding of the work required to restore our company,” Mr. Ortberg stated. The company had previously implemented temporary furloughs but indicated that these will be lifted due to the upcoming layoffs.
Since the beginning of 2019, Boeing has incurred losses exceeding $25 billion (approximately £19 billion), with the worker strike significantly impacting its cash flow. Jon Holden, the chief negotiator for the International Association of Machinists and Aerospace Workers union, expressed that union members are committed to their cause despite the company’s minimal improvements during negotiations before talks were paused.
In a preliminary report regarding its third-quarter financial performance, Boeing disclosed a cash burn of $1.3 billion (£994 million) for the quarter and a loss of $9.97 per share.
Furthermore, the company faced a court hearing in Texas on Friday after pleading guilty in July to a charge of criminal fraud conspiracy related to investigations into two fatal 737 MAX crashes. A judge is set to determine whether to accept Boeing’s offer to pay a $243.6 million (£187 million) fine and invest at least $455 million (£348 million) over three years to enhance its safety and compliance programs as part of a plea agreement.
This incident marks the latest in a series of troubles for the 737 MAX, including a three-week grounding earlier this year after a panel from a new aircraft failed mid-flight.
