Approximately one-tenth of Boeing's workforce is required to depart.
Struggling aerospace giant Boeing is set to let go of 10% of its workforce, impacting approximately 17,000 jobs, due to ongoing labor issues. In a message to employees, Boeing CEO Dave Calhoun stated that the company needs to align its workforce with "financial realities." The job cuts will affect leadership, management, and staff.
Furthermore, the delivery of the 777X jet has been postponed by a year, with customers now expecting their orders in 2026. Unfavorable news also comes from the defense sector, where substantial losses are anticipated.
Looking ahead to its anticipated third-quarter results on October 23, the company reported a loss per share of $9.97 on revenue of $17.8 billion, falling short of forecasts by nearly a billion dollars. Following this announcement, Boeing's stock dropped by 2.3% during after-hours trading.
Labor strike causing problems
The US corporation is dealing with a strike of 33,000 workers on the West Coast. According to rating agency S&P, this strike, which began on September 13, is costing Boeing $1 billion per month.
Midweek, Boeing withdrew its revised proposal and terminated negotiations in the labor dispute. The union representing the striking factory workers on the US West Coast is demanding a 40% wage increase over a four-year period and the reinstatement of a performance-based pension that was eliminated from the contract a decade ago. Initially, the employer side had offered a 30% wage increase over four years, among other perks, in September.
Recently, Boeing has reported significant losses and is currently saddled with a $60 billion debt. The company's leadership is also under scrutiny due to a series of technical issues. In the first half of this year, a section of the cabin wall of a Boeing 737 MAX-9 operated by Alaska Airlines separated during flight. The defense sector is also struggling - the division has recently suffered substantial losses. Furthermore, the company continues to battle chronic delivery delays.
Despite Boeing's ongoing labor issues, which include a strike costing the company $1 billion per month, the company is expected to share its quarterly figures on October 23. Analysts will closely examine these quarterly figures to gain insight into Boeing's financial situation and its ability to weather these challenges.
