ARLINGTON COUNTY, Virginia – Boeing job cuts will total 17,000 positions, which is 10 percent of its global workforce. Additionally, Boeing will delay the first deliveries of its 777X jet by a year. The company expects to record US$5 billion in losses during the third quarter. This situation occurs as the US plane maker continues to spiral amid a month-long strike. #BoeingJobCuts
CEO Kelly Ortberg 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 said.
Boeing shares fell 1.1 per cent in after-market trading.
The sweeping changes are a big move by Mr Ortberg, who arrived in August at the helm of the beleaguered plane maker promising to reset relations with the union and its employees.
Boeing recorded pre-tax earnings charges totalling US$5 billion for its defence business and two commercial plane programmes.
On Sept 20, Boeing ousted the head of its troubled space and defence unit Ted Colbert.
Boeing will report third-quarter earnings on October 23. The company now expects revenue of US$17.8 billion and a loss per share of US$9.97. Additionally, Boeing anticipates a negative operating cash flow of US$1.3 billion, which is better than expected.
Analysts on average were expecting Boeing to generate quarterly cash burn of negative US$3.8 billion according to London Stock Exchange Group data.
Mr Thomas Hayes, equity manager at Great Hill Capital, said by e-mail that the layoffs could put pressure on employees to end the strike. #BoeingJobCuts
“Striking workers who temporarily do not have a pay cheque do not want to become unemployed workers who permanently do not have a pay cheque,” Mr Hayes said.
Navigating Challenges: The Impact of Labor Strikes on Boeing’s Job Cuts and 777X Delivery
Moreover, the ongoing labor strike has exacerbated Boeing’s financial situation. As a result, the company now delays the first delivery of its 777X aircraft. This postponement illustrates how Boeing job cuts are a response to both internal challenges and external market conditions.
source
read more
