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Boeing's CEO announced a 10% reduction in the company's workforce.
Stephen Brashear/Getty Images
Boeing has announced a 10% reduction in its workforce of approximately 170,000 employees.
CEO Kelly Ortberg described the company’s situation as "challenging," particularly due to an ongoing strike.
The aircraft manufacturer continues to face repercussions from quality control issues affecting several of its aircraft models.
On Friday, Boeing revealed plans to reduce its workforce by 10%, delay the rollout of its 777X aircraft, and cease production of a freighter model as it navigates financial challenges stemming from an ongoing labor strike.
In a recent communication with staff, CEO Kelly Ortberg stated that Boeing is facing "challenging circumstances," emphasizing that "restoring our company necessitates difficult choices." The manufacturer is currently dealing with regulatory complications following an incident earlier this year involving a door plug failure on a 737 Max, alongside the impact of the labor strike.
Since taking over as CEO in August, Ortberg confirmed that job cuts would affect both executive and managerial roles. As reported at the end of 2023, Boeing employed around 170,000 individuals.
In addition to layoffs, other cost-reduction strategies include discontinuing production of the 767 cargo plane. According to analysts' estimates prior to these measures being announced, costs were escalating by up to $50 million daily due to approximately 33,000 workers remaining on strike since September 13th under the International Association of Machinists and Aerospace Workers in Seattle.
This week saw negotiations between Boeing and union representatives break down. Following this collapse in talks, Boeing filed a complaint with the National Labor Relations Board against the union on Thursday. Before implementing layoffs, Boeing had already initiated various cost-saving actions during this period including requesting some employees take one-week furloughs every four weeks.
A significant challenge for Boeing remains with its flagship project—the delayed delivery schedule for the new widebody aircraft model known as the 777X. Initial deliveries are now projected for late 2026 instead of earlier timelines previously set forth. With over 481 orders from more than twelve international airlines already placed for this model—reported by BI—the delay marks another setback; it is now five years behind schedule and has incurred losses exceeding $1.5 billion, which may increase further given additional postponements expected ahead.
This latest delay compounds existing issues related to other models like the 737 and 787, potentially eroding trust within industry circles regarding Boeing's reliability while steering carriers towards alternatives such as Airbus's A350 which is already operationally available.
