Boeing has announced plans to lay off about 10% of its employees, which amounts to around 17,000 workers.
This decision comes as the company struggles with ongoing financial losses and a strike that is severely impacting production of its popular airline planes.
Details of the Cut-offs
Announcement from the CEO
- New CEO Kelly Ortberg informed employees in a memo that the Cut-offs will include:
- Executives
- Managers
- Regular employees
Current Workforce
- Boeing currently employs approximately 170,000 people worldwide, primarily in manufacturing facilities located in:
- Washington
- South Carolina
Previous Measures
- The company had previously implemented temporary furloughs, but Ortberg stated that these would be paused due to the upcoming layoffs.
Impact on Production and Financial Outlook
Delayed Aircraft Rollouts
- Boeing is postponing the introduction of its new 777X airplane to 2026 instead of the previously planned 2025.
- The company will also stop producing the cargo version of the 767 jet in 2027 after completing existing orders.
Financial Losses
- Since the start of 2019, Boeing has incurred losses exceeding $25 billion.
- In the third quarter, Boeing reported a cash burn of $1.3 billion and a loss of $9.97 per share. Analysts had expected a loss of $1.61 per share, unaware of significant write-downs announced by Boeing, including:
- $2.6 billion related to 777X delays
- $400 million for the 767
- $2 billion for defense and space projects
Ongoing Strike and Its Effects
Union Strike
- Approximately 33,000 union machinists have been on strike since September 14. Recent talks have failed to reach an agreement, leading Boeing to file an unfair labor practices charge against the International Association of Machinists and Aerospace Workers.
Production Shutdowns
- The strike has halted production of Boeing’s best-selling 737 Max, as well as the 777 and 767 models. However, the company continues to produce 787s at a non-union facility in South Carolina.
CEO’s Challenges and Industry Scrutiny
Addressing Challenges
- Ortberg noted that Boeing is in a difficult position and will need to make tough decisions to remain competitive and meet customer demands.
Increased Scrutiny
- Following a recent incident involving a 737 Max during an Alaska Airlines flight, the Federal Aviation Administration has increased oversight of Boeing. The company is set to plead guilty to charges related to fraud connected to the Max aircraft.
Other Issues
- Boeing’s spacecraft was deemed unsafe by NASA, which raised concerns about its ability to transport astronauts from the International Space Station.
Boeing is working hard to navigate these challenges as it seeks to stabilize its operations and improve its financial outlook.
Source: Boeing Layoffs News
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