Boeing Will Lay Off 10% of Its Employees as Strike Cripples Airplane Production

Transportation

By Associated Press

Published 1 month ago on

October 11, 2024

Boeing announces massive layoffs and production delays as it grapples with financial losses and an ongoing worker strike. (AP File)

Boeing plans to cut 17,000 jobs, including executives and managers, as it faces ongoing financial struggles.
The company will delay the rollout of its new 777X plane and cease production of the 767 cargo jet by 2027.
Boeing's third-quarter results show a $1.3 billion cash burn and a loss of $9.97 per share, far exceeding analyst expectations.

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Boeing plans to lay off about 10% of its workers in the coming months as it continues to lose money and tries to deal with a strike that is crippling production of the company’s best-selling airline planes.

New CEO Kelly Ortberg told staff in a memo Friday that the job cuts, which could total about 17,000 positions, will include executives, managers and employees.

The company has about 170,000 employees worldwide, many of them working in manufacturing facilities in the states of Washington and South Carolina.

Boeing had already imposed rolling temporary furloughs, but Ortberg said those will be suspended because of the impending layoffs.

The company will delay the rollout of a new plane, the 777X, to 2026 instead of 2025. It will also stop building the cargo version of its 767 jet in 2027 after finishing current orders.

Financial Struggles and Ongoing Strike

Boeing has lost more than $25 billion since the start of 2019.

About 33,000 union machinists have been on strike since Sept. 14. Two days of talks this week failed to produce a deal, and Boeing filed an unfair-labor-practices charge against the International Association of Machinists and Aerospace Workers.

As it announced layoffs, Boeing also gave a preliminary report on its third-quarter financial results — and the news is not good for the company.

Third-Quarter Financial Results Show Significant Losses

Boeing said it burned through $1.3 billion in cash during the quarter and lost $9.97 per share. Industry analysts had been expecting the company to lose $1.61 per share in the quarter, according to a FactSet survey, but analysts were likely unaware of some large write-downs that Boeing announced Friday.

The company based in Arlington, Virginia, said it had $10.5 billion in cash and marketable securities on Sept. 30.

The strike has a direct bearing on cash burn because Boeing gets half or more of the price of planes when it delivers them to airline customers. The strike has shut down production of the 737 Max, Boeing’s best-selling plane, and 777x and 767s. The company is still making 787s at a nonunion plant in South Carolina.

“Our business is in a difficult position, and it is hard to overstate the challenges we face together,” Ortberg told staff. He said the situation “requires tough decisions and we will have to make structural changes to ensure we can stay competitive and deliver for our customers over the long term.”