Unpainted Boeing 737 Max aircraft are seen at the company’s facilities in Renton, Wash., on Sept. 24, 2024.
Lindsey Wasson/AP
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Lindsey Wasson/AP
Boeing plans to lay off about 10% of its workforce, about 17,000 people, in the coming months as it continues to lose money and tries to overcome a strike that has crippled production of the company’s best-selling airliners.
New CEO Kelly Ortberg said in a memo Friday to employees that job cuts include executives, managers and employees.
The company has approximately 170,000 employees worldwide, many of whom work at manufacturing facilities in the states of Washington and South Carolina.
Boeing has already imposed rolling temporary furloughs, but those will be suspended because of the upcoming layoffs, Ortberg said.
The company will further delay the launch of the new 777X to 2026 instead of 2025. It will also stop making the cargo version of its 767 jet in 2027 after completing current orders.
Boeing has lost more than $25 billion since the start of 2019.
Sep. About 33,000 union machinists have been on strike since 14 Two days of talks this week failed to reach an agreement, and Boeing filed an unfair-labor-practice charge against the International Union of Machinists and Aerospace Workers.
As it announced the layoffs, Boeing also gave its preliminary report on its third-quarter financial results — and the news wasn’t good for the company.
Boeing said it burned through $1.3 billion in cash and lost $9.97 a share in the quarter. Industry analysts expected the company to lose $1.61 per share in the quarter, according to a FactSet survey, but analysts may not have been aware of some of the biggest write-downs Boeing announced Friday — a $2.6 billion charge related to the 777X, a $400 delay. million for the 767, and $2 billion for defense and space projects, including new Air Force One jets, a space capsule for NASA and a military refueling tanker.
The Arlington, Virginia-based company said on Sept. 30 it had $10.5 billion in cash and marketable securities. Boeing is scheduled to release full third-quarter numbers on Oct. 23.
The strike has a direct impact on cash burn, as Boeing receives half or more of the cost of the planes when it delivers them to airline customers. The strike halted production of Boeing’s best-selling plane, the 737 Max, as well as the 777x and 767 planes. The company still manufactures 787s at a nonunion plant in South Carolina.
“Our business is in a tough spot, and it’s hard to overstate the challenges we face together,” Ortberg told employees. The situation “requires tough decisions and structural changes to ensure we can remain competitive and deliver to our customers for the long term,” he said.
Ortberg took over at Boeing in August, becoming the troubled company’s third CEO in less than five years. He is a longtime aerospace-industry official but comes from outside Boeing.
The new CEO faces many challenges to turn the company around.
In January, the Federal Aviation Administration increased surveillance of the company after a crew Max exploded during an Alaska Airlines flight. Boeing has agreed to plead guilty and pay fines for conspiracy to defraud tied to the Max, but relatives of the 346 people who died in the two Max crashes want a stiffer sentence.
Boeing drew attention for all the wrong reasons when NASA decided that a Boeing space shuttle wasn’t safe enough to carry two astronauts home from the International Space Station.
