Boeing to cut 17,000 jobs amid worker strike and financial losses

Posted by author October 12, 2024 Jobs

Boeing will cut 17,000 jobs – 10% of its workforce – as the US plane maker deals with various issues across its business.

Chief executive Kelly Ortberg told staff in an email on Friday that the cuts will include executives, managers and employees.

He said the downsizing is necessary to “align with our financial reality” after an ongoing strike by 33,000 workers on America’s West Coast halted production of its 737 MAX, 767 and 777 jets.

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

“While our business is facing near-term challenges, we are making important strategic decisions for our future and have a clear view on the work we must do to restore our company,” Mr Ortberg said.

The company had already imposed temporary furloughs, but Mr Ortberg said those will be suspended because of the impending lay-offs.

Boeing has lost more than $25bn (around £19bn) since the start of 2019, with the strike by workers having a direct effect on cash loss.

Two days of talks with the workers union failed to produce a deal to curb the industrial action – which started on 14 September over pay.

Jon Holden, lead negotiator for the International Association of Machinists and Aerospace Workers union, said members were “in this for the long haul” after the company offered only minor improvements before breaking off talks.

In a preliminary report on its third-quarter financial results, Boeing said it burned through $1.3bn (£994m) in cash during the quarter and lost $9.97 per share.

The company also faced a court hearing in Texas on Friday after pleading guilty to a criminal fraud conspiracy charge back in July after an investigation into two fatal 737 MAX crashes.

The judge will decide whether it accepts the plane maker’s offer to pay a $243.6m (£187m) fine and invest at least $455m (£348m) over three years to strengthen its safety and compliance programmes as part of a plea deal.

It is the latest in a series of problems with the 737 MAX, after the fleet was grounded for around three weeks earlier this year after a panel on a new aircraft blew out in mid-air.