Boeing Will Cut About 10% Of Its Workforce Amid Strike And Financial Struggles

11 Oct 2024 by Antonio Pequeño IV · Forbes

Topline

A whopping 10% of Boeing’s workforce will be gutted in the coming months, the aerospace company announced Friday, the latest sign of trouble for Boeing as it deals with billion-dollar losses and an ongoing factory strike.

The Boeing strike began last month. (Photo by Stephen Brashear/Getty Images)Getty Images

Key Facts

Boeing said in its announcement it needs to reset its workforce levels to “align” with its “financial reality and to a more focused set of priorities,” noting executives, managers and employees will be affected by the layoffs.

The layoffs will cut about 17,000 people from the company, CNBC reported.

Boeing also announced production and delivery changes, saying it will delay deliveries of its new 777X long-range airplane until 2026 and stop producing its 767 freighters, planes primarily used for shipping goods, by 2027.

The layoff news comes shortly after Boeing published preliminary third quarter results Friday, which revealed the company expects to report a loss of $9.97 a share.

Boeing is also in the middle of a strike from more than 30,000 factory workers who sought a new contract earlier this week before pay talks eventually collapsed.

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Tangent

Boeing shares are down nearly 2% in after hours trading this evening following a 3% jump from the stock that brought it up to $151.02 on Friday. The company’s stock is now down nearly 18% in the last three months.

Key Background

Boeing has been under a harsh limelight since January, when a door plug on one of its airplanes blew out during an Alaska Airlines flight and provoked the Federal Aviation Administration to halt production expansion of Boeing’s 737 Max aircraft. Production slumps have been exasperated by striking workers who are demanding pay raises and reached an impasse with the aerospace company this week. Union leaders accused Boeing of refusing to propose any wage increases while the company claimed it offered “increases in take-home pay and retirement.” Boeing is also under financial pressure following $1.4 billion in losses reported last quarter, a massive jump compared to the $149 million in losses it experienced in the same quarter a year prior. Boeing’s stock is around the lowest it has been all year, trading around $151 per share after starting 2024 at about $251 per share.