Boeing will cut 10% of its workforce, halting most 767 production amid the strike

Boeing will cut 10% of its workforce in the coming months and reduce production of its commercial jets amid a month-old strike that has left the company burning through cash as its factories idle.

The company said Friday it will end production of its Everett-built 767 freighter in 2027 after completing current orders for 29 jets. It has delayed the rollout of another Everett-built plane, its new 777X, until 2026, after years of certification delays and the recent discovery of a faulty part that grounded test flights earlier this year.

Boeing said Friday the job cuts will affect about 17,000 workers across all levels of the company. It's unclear how the cuts will affect the company's 66,000-person Washington workforce or striking machinists. In a note to employees Friday, new Boeing CEO Kelly Ortberg told employees that the company “needs to reset our workforce levels to align with our financial realities.”

“We need to keep a clear view of the task we face and be realistic about the time it will take to achieve key milestones on the road to recovery,” Ortberg continued.

“We need to focus our resources on performance and innovation in areas that are who we are, rather than spreading ourselves among many efforts that often lead to underperformance and underinvestment,” he said.

After a year of slow production following a panel blowout in January, Boeing was already in a weak financial position when more than 33,000 machinists walked off the job on September 13.

Now, as the strike enters its fifth week, each side accuses the other of refusing to negotiate in good faith and the two remain deeply divided over the terms of a new contract, particularly around wage increases and retirement benefits. Talks broke down this week after two days at the bargaining table, prompting Boeing to withdraw its latest offer.

On Friday, Boeing said it expects to lose $1.3 billion in operating cash flow in the third quarter of this year, according to financial results released ahead of its scheduled earnings call later this month. It had expected third-quarter revenue of $17.8 billion and a loss of $9.97 per share.

Picketing outside Boeing's Everett factory on Friday, Jeremy Niethammer, a 12-year Boeing veteran, was determined to hold the line even in the face of layoffs.

“What we're asking is not to cripple the company,” he said. “We're not asking for too much … and I think that's why the community is behind us.”

Uncertainty surrounding layoffs

Shortly after the machinists walked out in September, Boeing instituted a week off for non-union workers to save money as its factories idled. On Friday, Boeing said it would end a cycle of furloughs and cut its workforce by 10% in the coming months.

“We know these decisions will cause hardship for you, your family and our team, and I sincerely wish we could avoid making them,” Ortberg wrote to employees Friday. “However, drastic action is needed to restore the state of our business and our future.”

The layoffs will affect all functions across Boeing's 170,000-person workforce, from executives to managers to front-line workers.

Boeing leadership will share detailed information with employees next week, Ortberg said.

On Friday, the Society of Professional Engineering Employees in Aerospace, the union that represents Boeing's white-collar engineering workers, said it had asked the company for more details about the layoffs.

“Instead of focusing company resources on resolving the IAM strike and rebuilding regulatory and customer confidence, Boeing leadership has decided to undermine every aspect of the company,” SPEEA Executive Director Ray Goforth said in a prepared statement. “It does not inspire confidence that there is a real plan to save Boeing from its self-inflicted wounds.”

On the picket line Friday, workers were shocked by the job cuts — but divided about the future of their jobs and what it means for their strike.

Emanuel Lawrence, who has worked at Boeing for five years, said he was concerned about his own job security and the “longevity of the company.” But Michael Swall, who has been with the company for 1½ years, said Boeing can't afford to lose machinists.

“When this is resolved, after Boeing offers us a fair deal and we go back to work, we will be condemned,” Swale said. “Of course I'm worried about my job, everyone is. But it seems Boeing is doing it because they're scared.”

In Snohomish County, where Boeing is the top employer, the proposed layoffs will have significant repercussions, local leaders predicted Friday.

“Boeing's workforce is deeply integrated into many sectors, from aerospace suppliers to local service businesses, amplifying the ripple effect of any cuts,” Wendy Paeschbeg, president and CEO of the Economic Alliance of Snohomish County, said via email.

A survey of local aerospace suppliers “found both strong support for Boeing workers and growing concern about the future,” Poischbeg added.

U.S. Rep. Adam Smith, a Bellevue Democrat whose district includes Boeing's Renton factory, said he was “disappointed” by Boeing's decision to lay off workers.

“Boeing's success depends on its dedicated employees, and investing in them is critical to long-term recovery,” Smith wrote in a social media post. “Now more than ever, a just resolution of the machinists' strike is essential to restoring confidence.”

Before Friday's announcement, analysts at S&P Global estimated the strike would cost Boeing more than $1 billion a month.

In late 767

In its preliminary financial results released on Friday, Boeing said it reported a loss of $5 billion in the third quarter of this year. It expected it to lose $3 billion on the 777X and 767 programs in its commercial division.

That pushed the first delivery of the 777-9 to 2026 and the 777-8 freighter to 2028, resulting in a loss of $2.6 billion.

The Department of Defense, Aerospace and Security reported $5.5 billion in revenue and $2 billion in losses.

In his letter to employees, Ortberg said Boeing's defense and space divisions, which include its Starliner spacecraft, “were not where it needed to be.”

Boeing expects “significant new losses” in its defense division this quarter, driven by strikes, “continued program challenges” and the decision to halt production on the 767 freighter. The 767 and 737 airframes are used on Boeing fighter jets, and Boeing will end the commercial version of the 767, increasing the cost of its military derivative.

Boeing originally planned to end that 767 program in 2028, but a provision in the recently passed Federal Aviation Administration reauthorization bill would allow it to continue selling the plane until 2033.

FedEx and UPS are the only customers of the 767 commercial freighter. With a range of 3,255 nautical miles and the ability to carry up to 52 tons of cargo, the freighter variant began to expand Boeing's share of the cargo market in the mid-1990s.

At Everett, Boeing will continue to manufacture the KC-46 military tanker and the 777.

In a statement Friday, the machinists union said the strike would not affect Boeing's long-term plans for the 767 program. It called the company's announcement “dubious, at best” and said it was “critical” in light of current tensions around labor talks.

“The path to resolving this strike starts at the bargaining table,” the machinists union said “Reluctance to be at the table only prolongs the strike. CEO Ortberg has an opportunity to do things differently.”

A year of turmoil

Boeing has faced financial pressure and increased regulatory scrutiny for most of the year after a panel blew off a Renton-built 737 MAX plane midflight in January. The company has since scaled back production at its factories to focus on safety and quality, and is facing increased scrutiny from regulatory agencies.

On the same day it announced its workforce cuts and long-term production changes, a government watchdog accused the Federal Aviation Administration of failing to fix oversight of Boeing, letting defects and non-compliances in its planes slip through the cracks.

Boeing was also in court Friday to hear a plea deal it agreed to earlier this summer to resolve criminal fraud charges following two fatal 737 MAX crashes in 2018 and 2019. At that hearing, those who lost loved ones in the accident wanted more Criminal liability for Boeing and its executives for their role in the accident.

Ortberg said Friday that Boeing is focused on safety, quality and delivery to customers.

“We'll navigate the moment,” he said. “We will refocus our company, and we will restore trust with those who rely on us.”