Boeing to cut 17,000 jobs as losses deepen during factory strike

Boeing The company will cut 10% of its workforce, or about 17,000 people, as losses mount and a machinist strike that has idled its aircraft factories enters its fifth week. This will delay the launch of its new wide-body airplane.

The maker won't deliver its still-uncertified 777X wide-body plane until 2026, putting it nearly six years behind schedule and will stop building commercial 767 freighters in 2027, CEO Kelly Ortberg said in a staff memo Friday afternoon. .

Boeing expects to report a third-quarter loss of $9.97 per share, the company said in a surprise disclosure on Friday. It expects to report pretax charges of $3 billion to the commercial aviation unit and $2 billion to the defense business.

In preliminary financial results, Boeing said it expects operating cash flow of $1.3 billion for the third quarter.

“Our business is in a tough spot, and it's hard to overstate the challenges we face together,” Ortberg said. “Beyond navigating our current environment, we need to make tough decisions to reposition our company and make structural changes to ensure we can remain competitive and deliver for our customers over the long term.”

The job and cost cuts are the most dramatic moves yet from Ortberg, who has just over two months left in his tenure in the top job.

He was tasked with restoring Boeing after safety and production crises, but the labor strike was Ortberg's biggest challenge yet. Credit rating agencies have warned that the company is at risk of losing its investment-grade rating, and Boeing is burning through cash in what company leaders hoped would be a turnaround year.

S&P Global Ratings said earlier this week that Boeing is losing more than $1 billion a month from the strike, which began Sept. 13, when machinists overwhelmingly scrapped a tentative deal the company made with the union. Tensions are rising between manufacturers and unions, and Boeing withdrew a contract offer earlier this week.

On Thursday, Boeing said it filed an unfair labor practice complaint with the National Labor Relations Board accusing the International Association of Machinists and Aerospace Workers of negotiating in bad faith and misrepresenting the automakers' proposals. The union blasted Boeing for a sweetened offer that it argued had not been negotiated with the union and workers would not vote on it.

The job cuts, which Ortberg said will take place “in the coming months,” come after Boeing and hundreds of its suppliers scuttled workers in the wake of the Covid-19 pandemic, when demand has cratered.