- Boeing (NYSE:BA) plans to cut approximately 17,000 jobs, representing about 10 per cent of its global workforce
- This news comes at a particularly challenging time for Boeing, as 33,000 union machinists on the West Coast have entered their second month of strike action
- When Boeing reports Q3 results on Oct. 23, the company will elaborate on its significant financial losses, burning through US$1.3 billion in cash during Q3 and reporting a loss of US$9.97 per share
- The Boeing Co. last traded at US$148.99 per share
Boeing (NYSE:BA) plans to cut approximately 17,000 jobs, representing about 10 per cent of its global workforce.
The job cuts will affect employees across various divisions, including executives, managers and factory workers.
The announcement was made by Boeing’s CEO, Kelly Ortberg, who took over the reins in August.
In a media statement, Ortberg emphasized the need for “tough decisions” to ensure the company’s long-term competitiveness and ability to deliver for its customers. The layoffs are part of a broader cost-cutting strategy that includes delaying the launch of the 777X jetliner to 2026 and discontinuing production of the 767 Freighters by 2027.
“Our business is in a difficult position, and it is hard to overstate the challenges we face together,” he said.
“We need to be clear-eyed about the work we face and realistic about the time it will take to achieve key milestones on the path to recovery,” the statement continued. “We also need to focus our resources on performing and innovating in the areas that are core to who we are, rather than spreading ourselves across too many efforts that can often result in underperformance and underinvestment.”
The layoffs are expected to be implemented over the coming months, with affected employees receiving worker adjustment and retraining notifications to provide 60 days’ notice before their employment ends. This move is seen as a necessary step to stabilize the company’s finances and navigate the ongoing strike and production challenges.
This news comes at a particularly challenging time for Boeing, as 33,000 union machinists on the West Coast have entered their second month of strike action. The strike, which began on Sept. 14, has severely impacted Boeing’s production capabilities, particularly for its best-selling 737 Max (pictured above) and 777 aircraft. The company has already faced significant financial losses, burning through US$1.3 billion in cash during Q3 and reporting a loss of US$9.97 per share.
When Boeing reports Q3 results on Oct. 23, the company stated it expects to report revenue of US$17.8 billion for the quarter.
In a news release on this, Ortberg explained that the business is facing near-term challenges, but the team is making decisions for its future and has a clear view on the work that needs to be done to restore the company.
“These decisive actions, along with key structural changes to our business, are necessary to remain competitive over the long term,” he said. “We are also focusing on areas that are critical to our future and will ensure we have the balance sheet necessary to invest, support our people and deliver for our customers.”
Boeing’s decision to cut jobs and delay key projects underscores the severe pressures facing the aerospace industry. As the company works to resolve its labour disputes and streamline operations, the impact on its workforce and production timelines will be closely watched by industry analysts and investors.
The aerospace stock faced one problem after another this year, from its new Starliner astronaut capsule departing the International Space Station leaving its crew stranded in space, conspiracy to defraud the United States in connection with two fatal 737 Max crashes and the ongoing investigation into its merger with Spirit AeroSystems Holdings Inc. (NYSE:SPR) misleading investors.
Boeing develops, manufactures and services commercial airplanes, defence products and space systems for customers in more than 150 countries.
The Boeing Co. (NYSE:BA) last traded 1.34 per cent lower at US$148.99 per share. Boeing stock has fallen 42.84 per cent since the year began.
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(Top photo: Boeing)