Execs, Managers, And Employees Included In Cuts

Boeing continues to bleed money due to the strike hurting production of aircraft. As a result, the manufacturer plans to lay off about 10% of its workforce in the coming months.

Of the company’s 170,00 employees worldwide, the job cuts will amount to about 17,000 and will be across the board to include executives, managers, and employees, according to a memo the company’s new CEO Kelly Orgberg sent to staff on October 11. Temporary rolling furloughs will be suspended when the layoffs begin.

Since early 2019, Boeing has lost more than $25 billion. The strike directly affects cash flow because the company receives about half the price of airplanes when they are delivered to airline customers. Boeing burned through $1.3 billion in cash during Q3, losing $9.97 per share when analysts were expecting a loss of $1.61 per share.

About 33,000 union machinists have been on strike for about a month now, which has shut down production of the best-selling 737 MAX aircraft along with 777 and 767 models. Deliveries of the new 777-9 version have been delayed a year to 2026. Boeing is still producing its 787 aircraft at a non-union plant in South Carolina, and will discontinue the cargo version of the 767 after current orders are completed in 2027.

Ortberg told staff, “Our business is in a difficult position, and it is hard to overstate the challenges we face together,“ adding that the situation “requires tough decisions and we will have to make structural changes to ensure we can stay competitive and deliver for our customers over the long term.”

FMI:  www.boeing.com/