Boeing is cutting 17,000 jobs “to align with our financial reality” as the beleaguered aerospace giant grapples with a sweeping strike and the persisting fallout from its latest safety crisis.
The American firm also announced plans to delay the first delivery of its 777X commercial jetliner by a year, and braced investors for “substantial” new losses in its struggling defense business.
Kelly Ortberg, its new chief executive, declared that “tough decisions” and “structural changes” were required. “We need to be clear-eyed about the work we face,” he wrote in a memo to staff on Friday, “and realistic about the time it will take to achieve key milestones on the path to recovery.”
About 33,000 Boeing workers in Washington and Oregon went on strike a month ago, halting production of the company’s 737 Max, 767 and 777 jets amid a standoff over pay. Negotiations remain at an acrimonious stalemate.
It comes amid a dire year for Boeing. January’s cabin panel blowout during a flight of a brand new Max jet sparked a fresh crisis surrounding the safety and quality of its planes.
The high-profile mission of its Starliner spacecraft, which landed back on Earth last month without the two astronauts it carried to the International Space Station, has also raised questions about Boeing’s troubled space business.
Boeing “must … reset our workforce levels to align with our financial reality”, Ortberg told the company’s staff. “Over the coming months, we are planning to reduce the size of our total workforce by roughly 10%,” he said. “These reductions will include executives, managers and employees.”
He promised staff “more tailored information” next week about what this will mean of their department.
Shares in Boeing fell 1.6% during after-hours trading, after the news was disclosed.
“As we move through this process, we will maintain our steadfast focus on safety, quality and delivering for our customers,” said Ortberg.
“We know these decisions will cause difficulty for you, your families and our team, and I sincerely wish we could avoid taking them. However, the state of our business and our future recovery require tough actions.”