Kelly Ortberg, CEO of American aircraft manufacturer Boeing, said that the company will cut 17,000 jobs, or 10% of its global workforce, postpone the first delivery of its 777X aircraft by a year, and announce significant new losses in its defense business as the strike affects… Continuing for a month on the company’s finances. Friday.
Ortberg said in a letter to employees that the company must realign its workforce levels “in line with our financial reality” after a strike by 33,000 workers on the US West Coast led to the halt of production of its 737 MAX, 767 and 777 aircraft.
“We have realigned our workforce levels to align with our financial realities and with a more focused set of priorities. Over the coming months, we plan to reduce the size of our total workforce by approximately 10 percent. These reductions will include executives, directors and employees,” Ortberg’s letter said.
Boeing shares fell 2.3 percent in after-market trading.
Ortberg also said Boeing has notified customers that the company now expects delivery of the first 777X in 2026 due to challenges Boeing has faced in development, as well as from the temporary pause in flight testing and ongoing work stoppages. Boeing has already faced certification issues for the 777X, which has significantly delayed the plane’s launch.
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Boeing, which reports third-quarter earnings on October 23, said in a separate statement that it now expects revenue of $17.8 billion, a loss per share of $9.97, and negative operating cash flow of $1.3 billion.
“While our business faces near-term challenges, we are making important strategic decisions for our future and have a clear vision of the work we need to do to restore our company,” Ortberg added in a statement.
Boeing will end its 767 freighter program in 2027 when it completes and delivers the remaining 29 aircraft on order, but said production of the KC-46A carrier will continue.
Reaching an agreement to end the work stoppage is critical for Boeing. Rating agency Standard & Poor’s estimated that the strike was costing it $1 billion a month, and that it was at risk of losing its valuable investment-grade credit rating.
Even before the strike began on September 13, the company was burning cash as it struggled to recover from a mid-air panel explosion in January on a new plane, which exposed weak safety protocols and prompted US regulators to limit its production.
-Reporting by Alison Lambert and David Shepardson; Edited by Rod Nickel
