U.S. planemaker Boeing will cut 17,000 jobs, or 10% of its global workforce, delay first delivery of its 777X jet by a year and announced substantial new losses in its defense business as a month-long strike batters company finances, CEO Kelly Ortberg said on Friday.
Ortberg said in a message to employees that the company must reset its workforce levels “to align with our financial reality” after a strike by 33,000 U.S. West Coast workers shuttered production of its 737 MAX, 767 and 777 jets.
“We reset our workforce levels to align with our financial reality and to a more focused set of priorities. Over the coming months, we are planning to reduce the size of our total workforce by roughly 10 percent. These reductions will include executives, managers and employees,” Ortberg’s message said.
Boeing shares fell 2.3 per cent in after-market trading.
Ortberg also said Boeing has notified customers that the company now expects first delivery of its 777X in 2026 due to the challenges Boeing has faced in development, as well as from the flight-test pause and ongoing work stoppage. Boeing had already faced issues with certification of the 777X that had significantly delayed the plane’s launch.
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Boeing, which reports its third-quarter earnings on Oct. 23, said in a separate release it now expects revenue of $17.8 billion, a loss per share of $9.97, and negative operating cash flow of $1.3 billion.
“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,” Ortberg added in a statement.
Boeing will end its 767 freighter program in 2027 when it completes and delivers the remaining 29 planes ordered but said production for the KC-46A Tanker will continue.
Reaching a deal to end the work stoppage is critical for Boeing. Ratings agency S&P estimated the strike is costing it $1 billion a month and it is at risk of losing its prized investment-grade credit rating.
Even before the strike began on Sept. 13, the company had been burning cash as it struggled to recover from a January mid-air panel blowout on a new plane that exposed weak safety protocols and spurred U.S. regulators to curb its production.
–Reporting By Allison Lampert and David Shepardson; editing by Rod Nickel
