Boeing plans to lay off 17,000 workers, or 10% of its staff, as the company’s losses increase and the fifth week of a machinist strike continues to shut down its airplane manufacturing.
Boeing said in a surprising announcement on Friday that it expects to record a $9.97 per share loss in the third quarter. It assumed leadership roles in both its defense and commercial aircraft divisions.
In addition, the company will cease producing commercial 767s in 2027 and will not deliver its uncertified 777X wide-body aircraft until 2026, six years behind schedule, according to a staff letter written by CEO Kelly Ortberg on Friday afternoon.
“It is difficult to overstate the challenges we face together, and our business is in a difficult position,” Ortberg stated. “To guarantee we can stay competitive and perform for our clients over the long term, recovering our firm will need harsh decisions and structural reforms, in addition to managing our present environment.”
Just over two months into his position as top dog, Ortberg’s job and cost-cutting measures are the most significant ones to date.
The labor strike has been Ortberg’s largest challenge to date, although he was given the responsibility of reviving Boeing following safety and manufacturing difficulties.
Boeing has been spending a lot of money in what company executives had believed would be a year of recovery, but credit rating agencies have warned the business it might lose its investment-grade status.
This week, S&P Global Ratings said that Boeing is losing more than $1 billion monthly as a result of the strike, which started on September 13 after the union’s machinists rejected a preliminary agreement the firm had struck. Due to growing tensions between the union and the company, Boeing withdrew its offer of a contract earlier this week.
