Boeing announced it will cut 10% of its workforce, equating to roughly 17,000 jobs, as the company faces significant financial losses and operational challenges. The ongoing machinists strike, which has lasted five weeks, has halted production on several key aircraft, including some of Boeing’s best-selling jets, adding to the company’s difficulties. In addition to the layoffs, Boeing will delay the launch of its highly anticipated 777X plane until 2026. The company reported a third-quarter loss of $9.97 per share and a $3 billion charge in its commercial airplanes business. Boeing’s CEO, Kelly Ortberg, emphasized the tough decisions ahead, citing the need to navigate these mounting challenges for future recovery.
Since taking over as Boeing’s CEO in August, Kelly Ortberg has faced significant challenges in mending the strained relationship between the company and its workforce. Tensions escalated in September when over 33,000 members of the International Association of Machinists and Aerospace Workers District 751 went on strike, rejecting Boeing’s contract offer of a 25% wage increase over four years. The strike is costing Boeing an estimated $1 billion per month. Adding to its troubles, Boeing appeared in court over a settlement with the Justice Department regarding two fatal 737 Max crashes in 2018 and 2019. Boeing agreed to plead guilty to fraud related to the crashes, though the settlement is opposed by the victims’ families. Amid mounting financial pressures, Boeing has implemented cost-cutting measures, including a hiring freeze and suspended furloughs, while battling the risk of a credit rating downgrade. Negotiations with the union remain deadlocked, as the union seeks a 40% wage increase, further complicating Boeing’s path to recovery.
