Boeing Announces Major Job Cuts and Production Delays Amid Ongoing Crisis
Boeing, the US aerospace giant, is facing a severe crisis as CEO Kelly Ortberg revealed plans to cut 17,000 jobs, representing 10% of its global workforce. This drastic decision comes in the wake of a prolonged strike that began on September 13, affecting approximately 30,000 workers and halting production of key aircraft models including the 737 MAX, 767, and 777. In a letter to employees, Ortberg emphasized the necessity of realigning the workforce to meet the company's financial reality, stating, "Our business is going through a difficult time, and it is not easy to exaggerate the challenges we face."
The layoffs will encompass executives, managers, and rank-and-file employees, with more details expected to be communicated in the coming week. This restructuring is crucial as Boeing also reported significant financial losses, projecting a loss of $9.97 per share for the third quarter, with revenues estimated at $17.8 billion. The company will release its detailed financial results on October 23.
In addition to the job cuts, Boeing announced a delay in the delivery of its highly anticipated 777X cargo jet, now expected to enter service in 2026 instead of 2025. This delay is attributed to ongoing development challenges and the impact of the strike, which is costing the company an estimated $1 billion per month, according to ratings agency S&P. The decision to end the 767 cargo program by 2027 further underscores the company's need to streamline operations amidst financial difficulties.
Boeing's troubles have been compounded by a series of technical incidents that have plagued the company throughout 2024. Notably, a January incident involving a 737 MAX 9 that lost a door mid-flight raised serious safety concerns, leading to federal investigations and a significant drop in stock value, costing the company over $40 billion in market valuation. As the company navigates these challenges, Ortberg remains hopeful, stating, "While our business faces short-term challenges, we are making important strategic decisions about our future and have a clear vision of the work we need to do to restore our business."
