Boeing is implementing a 10% reduction in its employee count.
Troubled aircraft manufacturer Boeing is set to dismiss 10% of its workforce, impacting approximately 17,000 jobs. CEO Dave Calhoun highlighted the need for the company to adapt to "financial realities," with the downsizing affecting both high-level executives and entry-level staff.
Furthermore, the delivery of Boeing's 777X jet has been pushed back by a year, with customers now anticipated to receive their orders in 2026. In addition to this, the defense division is expected to face significant financial losses.
Boeing's predicted third-quarter earnings, set to be released on October 23, showed a loss per share of $9.97, surpassing the projected deficit, and a revenue of $17.8 billion, almost $1 billion less than expected. The company's stock decreased by 2.3% in after-hours trading following this announcement.
Strike Disruption
Boeing is currently dealing with a strike involving 33,000 workers on the West Coast, which has been ongoing since September 13. This labor conflict is estimated to cost Boeing $1 billion in monthly expenses, according to S&P ratings agency.
On a midweek, Boeing withdrew its enhanced proposal and terminated negotiations in relation to the labor dispute with its employees. The union representing the striking factory workers in 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. The company's initial proposal in September had been to offer a 30% wage increase over four years, as well as reintroduce a performance bonus and improve retirement benefits.
Recently, the company has reported substantial losses and has an outstanding debt of $60 billion. The company's leadership is also under scrutiny due to a string of technical issues. An incident early this year involved the cabin wall of a Boeing 737 MAX-9 operated by Alaska Airlines separating during flight. The defense division is also facing challenges, resulting in billions in losses, and the company is also grappling with persistent delivery delays.
As a result of the financial challenges, Boeing is implementing a significant reduction of workforce, estimating to dismiss 10% of its employees, affecting approximately 17,000 jobs. The ongoing strike among 33,000 workers on the West Coast, which started on September 13, is exponentially increasing the company's monthly expenses, reported to be over $1 billion by S&P ratings agency, further exacerbating the need for workforce reduction.
