Boeing Announces Major Job Cuts Amid Ongoing Strike and Financial Losses
Boeing, the leading US aircraft manufacturer, has announced a significant reduction in its workforce, cutting approximately 17,000 jobs, which equates to 10% of its global workforce. This drastic measure comes as the company grapples with severe financial challenges exacerbated by a month-long strike that has halted production at its factories. The announcement was made by CEO Kelly Ortberg, who emphasized the need to realign the workforce in response to the company's financial reality and ongoing operational difficulties.
The layoffs are part of a broader strategy to stabilize the company, which has been in the red since 2019, suffering losses of around $1.8 billion in the first half of this year alone. Boeing's third-quarter projections indicate a loss of $9.97 per share and negative operating cash flow of $1.3 billion, totaling an expected revenue of $17.8 billion. Ortberg stated that the company must make tough decisions to ensure long-term competitiveness and deliver for customers.
In addition to workforce reductions, Boeing has delayed the first delivery of its 777X widebody jet by a year, now expected in 2026, due to development challenges and the impact of the ongoing strike. The company has also decided to cease production of its 767 commercial jets by 2027. The strike, which began on September 13, has been costly, with estimates suggesting it is costing Boeing more than $1 billion each month.
Boeing's management is currently engaged in negotiations with unions to resolve the strike, but tensions remain high after two wage increase offers were rejected. The company is under pressure to restore its operations and improve its financial standing, especially as credit rating agencies warn of the risk of losing its investment-grade status.
As Boeing prepares to report its third-quarter results on October 23, the focus will be on how these strategic decisions will impact its recovery and future operations. The company aims to navigate through these challenging times and emerge stronger by making necessary structural changes.
