Boeing is set to cut 17,000 jobs—10% of its workforce—as the company grapples with multiple challenges. In an email to staff on Friday, CEO Kelly Ortberg announced that the layoffs will affect executives, managers, and employees across the organization.
Ortberg explained that the reduction is necessary to “align with our financial reality” following a strike by 33,000 workers on the U.S. West Coast, which has halted production of the 737 MAX, 767, and 777 jets.
Additionally, Boeing will delay the launch of its 777X plane to 2026, a year later than planned, and cease production of the cargo version of the 767 by 2027, once current orders are fulfilled.
“While we are facing short-term challenges, we are making strategic decisions for our future and have a clear plan to restore the company,” Ortberg said.
The strike, which began on September 14 over pay disputes, has already prompted temporary furloughs, but Ortberg confirmed these will be lifted as layoffs are put in place.
Boeing has suffered over $25 billion in losses since 2019, with the strike contributing to a recent $1.3 billion cash burn in the third quarter.
Talks with the union, the International Association of Machinists and Aerospace Workers, failed to resolve the strike after two days of negotiations. Lead union negotiator Jon Holden stated members are “in this for the long haul,” citing insufficient progress from Boeing before talks broke down.
Boeing is also dealing with legal issues, facing a court hearing in Texas related to its guilty plea on a criminal fraud conspiracy charge following two fatal 737 MAX crashes. The company has offered to pay a $243.6 million fine and invest $455 million over three years to enhance safety and compliance programs as part of a plea agreement.
The 737 MAX has faced repeated challenges, including a three-week grounding earlier this year after a panel on a new aircraft blew out mid-flight.