Boeing BA has revealed plans to cut its workforce by about 10%, reportedly equating to approximately 17,000 jobs.
What Happened: The layoffs will unfold over the next few months, affecting executives, managers, and other employees. Kelly Ortberg, Boeing’s president and CEO, communicated this decision to staff via email. According to a Reuters report, these layoffs will impact nearly 17,000 jobs.
The company has been grappling with significant challenges this year, including the grounding of Boeing 737 Max planes in January following a mid-flight incident.
In July, Boeing accepted a guilty plea over crashes involving the 737 Max in 2018 and 2019, which resulted in over 300 fatalities.
Additionally, Boeing’s Starliner spacecraft, which transported NASA astronauts to the International Space Station in June, returned without astronauts in September due to technical issues.
Nearly 33,000 Boeing factory workers have been on strike since mid-September, further complicating the company’s situation. Ortberg emphasized the necessity of these layoffs to align with Boeing’s financial reality and future recovery plans.
The delivery of the first 777X airplane is now postponed to 2026, as stated in Ortberg’s memo.
Why It Matters: The layoffs come amid a tumultuous period for Boeing, marked by ongoing labor strikes and safety concerns.
The strike, which began on Sept. 13, has significantly disrupted production, leading to a projected drop in October deliveries. Despite attempts to negotiate with the union, no agreement has been reached, and Boeing’s credit rating has been placed under negative watch by S&P Global Ratings.
Adding to the challenges, the Federal Aviation Administration (FAA) recently issued a safety alert regarding the Boeing 737’s rudder system, further complicating the company’s situation.
The decision to cut health care benefits for 33,000 striking workers has also sparked criticism from the International Association of Machinists and Aerospace Workers, adding to the tension.
Read Next:
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo courtesy: Shutterstock
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
