Boeing, a major aerospace company, is facing significant challenges that have led to the decision to lay off approximately 10% of its workforce, which amounts to about 17,000 employees. This move comes as the company continues to struggle financially and grapples with a worker strike that is impacting the production of its popular airline planes.
The company, which currently has around 170,000 employees worldwide, is planning to cut jobs across different levels, including executives, managers, and regular employees. The majority of Boeing’s workforce is based in manufacturing facilities located in Washington and South Carolina.
In addition to the layoffs, Boeing is also making other significant changes to address its financial difficulties. The rollout of a new plane, the 777X, has been delayed to 2026 from the previously planned 2025 timeline. Furthermore, the company has decided to halt production of the cargo version of its 767 jet in 2027 after fulfilling current orders.
Boeing has been facing substantial financial losses, totaling over $25 billion since the beginning of 2019. The ongoing strike by 33,000 union machinists, which started on September 14, has further exacerbated the company’s financial challenges. Despite recent talks, a deal has not been reached, leading Boeing to file an unfair-labor-practices charge against the International Association of Machinists and Aerospace Workers.
As part of its efforts to address its financial situation, Boeing provided a preliminary report on its third-quarter financial results, revealing significant cash burn and losses. The company burned through $1.3 billion in cash during the quarter and reported a loss of $9.97 per share. This performance was worse than analysts’ expectations, partly due to large write-downs announced by Boeing.
The challenges faced by Boeing have prompted the new CEO, Kelly Ortberg, to acknowledge the difficult position the company is in and the need for tough decisions to ensure long-term competitiveness and customer delivery. Ortberg, who took over as CEO in August, is the third CEO at Boeing in less than five years and faces the daunting task of turning the company around.
In addition to financial struggles, Boeing has also faced increased scrutiny and legal challenges. The Federal Aviation Administration has heightened its oversight of the company following safety incidents, and Boeing has agreed to plead guilty to fraud charges related to its 737 Max aircraft. Furthermore, concerns have been raised about the safety of Boeing spacecraft, with NASA determining that a Boeing spacecraft was not safe enough to carry astronauts home from the International Space Station.
Overall, Boeing’s decision to lay off employees and implement other cost-cutting measures reflects the significant challenges facing the company. As it navigates financial difficulties, legal issues, and operational disruptions, Boeing remains focused on making necessary changes to ensure its long-term viability and success in the aerospace industry.
