BOEING SLASHES WORKFORCE: 10% Cut, 777X Delayed (Image:Boeing)
Boeing announced on Saturday that the aviation major is planning to cut 10% of its global workforce to curb major financial challenges. The company is set to furlough workers from equivalent to approximately 17,000 positions as reported by AFP. This decision comes in response to a projected third-quarter loss which is worsened by a month-long machinist strike in the Seattle area, as per the report.
Good Jobs Going Away: Boeing will cut 17,000 jobs, or 10 per cent of its global workforce, delay the first delivery of its 777X jet by a year and announce substantial new losses in its defence business as a monthlong strike batters company finances. The strike is costing Boeing $… pic.twitter.com/343S4teGSE
— John Cremeans USA (@JohnCremeansUSA) October 11, 2024
The strike involves 33,000 machinists from the International Association of Machinists and Aerospace Workers (IAM) which began on September 13. It was said that the union members are demanding substantial wage increases and the reinstatement of their pension plan cited stagnant wages over the past decade amid rising inflation. Boeing has accused the union of making unreasonable demands and recently suspended negotiations after offering a 30% wage increase.
Boeing CEO Kelly Ortberg pressed on the need to “reset workforce levels to align with our financial reality.” It was said that the planned reductions would affect employees across all levels including executives, managers, and workers. The company also announced cost-cutting measures and delays in production due to the strike, according to AFP.
Also, read| By Astronauts For Astronauts: Boeing Starliner To Return Crewless
The work stoppage is expected to contribute to $3 billion in pre-tax charges to Boeing’s commercial aviation sector for the third quarter. This is part of an overall anticipated loss of $9.97 per share. Ortberg remains focused on Boeing’s long-term competitiveness, despite these short-term challenges. Also, Boeing’s shares fell by about 1% in after-hours trading on Friday. The company will announce its second-quarter results today providing more information about its financial situation. Ortberg assured employees that more details on the workforce cuts would be shared next week, as stated by AFP.
As per the report, Boeing’s challenges are compounded by existing problems including safety concerns over its commercial aviation division and setbacks in its Starliner space program. Additionally, the company announced further delays to the 777X aircraft with the first delivery now pushed back to 2026 from 2025. Boeing will also cease production of its 767 Freighter in 2027 after fulfilling current orders.
The company also faces legal issues related to the 737 Max aircraft. A Texas judge heard arguments over a proposed settlement between Boeing and the U.S. Department of Justice concerning the 737 MAX grounded following two fatal crashes in 2018 and 2019 and the family members of crash victims urged the court to reject the settlement seeking criminal prosecution of Boeing and its executives.
Also, read| Boeing Starliner Returns Without Astronauts
