Boeing has announced it is slashing 17,000 jobs as it continues to weather multiple reputational and internal crises. On top of the lay-offs, the world’s former number one aerospace firm is also delaying production of its 777X, in moves described by its new CEO Kelly Ortberg as the “tough decisions” and “structural changes” necessary to stabilise the business and secure its future.
“We need to be clear-eyed about the work we face,” Ortberg told staff in a memo on Friday, “and realistic about the time it will take to achieve key milestones on the path to recovery.”
Safety, legal cases and strikes
In addition to a litany of whistleblower accusations, safety incidents which have seen parts of planes falling off and the blow-out of a 737 Max 9 plug door mid-flight, investigations and fleet groundings, the manufacturer is also in the midst of an industrial action battle that S&P estimates is costing $1 billion a month.
The four-week-long strike by around 33,000 workers in Washington and Oregon has hit production of the 737 Max, 767, and 777 – something the company has now at least partially blamed for the 777’s pushed-back delivery date. The latest memo cited “the challenges we have faced in development, as well as from the flight test pause and ongoing work stoppage” as the reasons behind the decision. “We have notified customers that we now expect first delivery in 2026,” Ortberg added.
Workforce to be cut at all levels of seniority
More “tailored information” about the restructure is in the pipeline for the coming days, the firm said, but it did make clear that no one would be immune from the process which aims to “reset our workforce levels to align with our financial reality”, Ortberg said. “Over the coming months, we are planning to reduce the size of our total workforce by roughly 10%,” he added, noting that “These reductions will include executives, managers and employees.”
The space side of Boeing is in trouble too, after its Starliner spacecraft suffered thruster failures and helium leaks. Two astronauts it should have brought back from the International Space Station will return to Earth in early 2025 via Elon Musk’s SpaceX Dragon instead – a humiliation that Boeing could do without.
Falling further
With the company under S&P CreditWatch and at risk of a downgrade, the stock market reacted to the jobs announcement and production delay with a 1.6% smackdown to Boeing’s share price during after-hours trading, but the company “will maintain our steadfast focus on safety, quality and delivering for our customers,” Ortberg promised. Addressing employees, he said: “We know these decisions will cause difficulty for you, your families and our team, and I sincerely wish we could avoid taking them. However, the state of our business and our future recovery require tough actions.”
