WORLD
Amid losses and employees’ strike, Boeing announces 17,000 job cuts
- IBJ Bureau
- Oct 13, 2024
Boeing will cut 17,000 jobs – 10 per cent of its global workforce – delay first deliveries of its 777X jet by a year and record $5 billion in losses in the third quarter, as the US planemaker continues to spiral during a month-long strike.
Boeing CEO Kelly Ortberg has said in a message to employees that the significant downsizing is necessary “to align with our financial reality” after an ongoing strike by 33,000 US West Coast workers halted 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 per cent. These reductions will include executives, managers and employees,” Mr Ortberg’s message has said.
The sweeping changes are a big move by Mr Ortberg, who arrived in August at the helm of the beleaguered planemaker promising to reset relations with the union and its employees.
Boeing recorded pre-tax earnings charges totalling $5 billion for its defence business and two commercial plane programmes. On September 20, Boeing had ousted the head of its troubled space and defence unit, Ted Colbert.
Boeing, which reports 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 a better-than-expected negative operating cash flow of $1.3 billion.
Thomas Hayes, an equity manager of Great Hill Capital, has said that the layoffs can put pressure on employees to end the strike.
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