Dive Brief:
- Boeing plans to cut 10% of its workforce, roughly 17,000 employees, in the coming months in an effort to preserve cash due to the ongoing workers strike, President and CEO Kelly Ortberg announced Friday.
- The layoffs will include executives, managers and employees, Ortberg said in the memo, and employees will learn how their organizations will be impacted this week. As a result of the cuts, Boeing will not proceed with another round of furloughs.
- As part of the multi-pronged cost-cutting plan, the plane maker will also delay its first 777-9 plane delivery to 2026 and 777-8 freighter to 2028, as well as end its 767 freighters production in 2027, according to an Oct. 11 earnings release.
Dive Insight:
The Society of Professional Engineering Employees in Aerospace, which represents more than 19,000 Boeing employees, stated in Oct. 11 update it contacted the manufacturer to learn how the layoffs would affect its members. SPEAA’s contract with Boeing includes a process that gives workers cash severance payments and three months of continued health insurance benefits, the union stated.
Boeing expects to report another bruising quarter when it releases Q3 results later this month, with operating losses of $1.3 billion and $17.8 billion in revenue, down from $18.1 billion a year ago.
The International Association of Machinists and Aerospace Workers District 751 strike, which is now entering its fifth week, is costing Boeing between $50 million and $150 million a day, according to aerospace consulting firm Leeham News and Analysis.
The work stoppage is also affecting Boeing’s defense, space and security business. The portfolio is expected to see a $2 billion loss in Q3 due to higher estimated costs on 2026 production contracts and beyond, according to the earnings release.
“While our business is facing near-term challenges, we are making important strategic decisions for our future and have a clear view on the work we must do to restore our company,” Ortberg said in the earnings release.
The layoffs are one of many changes Ortberg has implemented since taking over as CEO last month. The chief executive ousted Ted Colbert, who had overseen the space and defense division, according to media reports. BDS COO Steve Parker is serving as interim CEO while Boeing searches for Colbert’s replacement, Breaking Defense reported.
