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BOEING will cut 17,000 jobs, or 10% of its global workforce, and delay the first delivery of its 777X jet by one year after posting a US$5 billion loss in the third quarter of 2024. The move is seen as an effort to end a mass strike by 33,000 Boeing workers that has halted production of the 737 MAX, 767 and 777 jets.
“Workers who are on strike and temporarily unpaid do not want to be unemployed and permanently unpaid. I expect the strike to end within a week because these workers do not want to be part of the next wave of layoffs involving 17,000 people,” said Thomas Hayes, equity manager at Great Hill Capital, as reported by Reuters, Sunday (10/13), 2024.
According to CEO Kelly Ortberg said in a message to employees that the significant downsizing was necessary because of the company’s increasingly critical financial condition.
“We are realigning our workforce to reflect our current financial situation and a more focused set of priorities. Over the next several months, we plan to reduce our total workforce by approximately 10%. This reduction will include executives, managers and staff,” Ortberg said.
The move is a major step for Ortberg, who in August pledged to improve relations with unions and employees. Boeing took a US$5 billion pretax charge for its defense business and two commercial airplane programs.
Boeing expects revenue of US$17.8 billion, a loss per share of US$9.97 and a better-than-expected negative operating cash flow of US$1.3 billion. Analysts on average expect Boeing to have a quarterly cash burn of negative US$3.8 billion, according to LSEG data. [sources/photo special]
