In a stark reflection of the ongoing struggles facing one of America’s largest aerospace giants, Boeing has announced plans to lay off approximately 10% of its workforce, amounting to roughly 17,000 employees. These layoffs come as the company battles deep financial losses and a crippling strike that has halted production of its most profitable planes.
Boeing’s new CEO, Kelly Ortberg, delivered the sobering news to staff in a memo on Friday. The job cuts will affect employees across the board, from executives and managers to rank-and-file workers. This decision comes as Boeing grapples with a series of financial challenges, exacerbated by labor unrest and the continued fallout from previous scandals. Ortberg, an industry veteran but new to Boeing, now faces the monumental task of steadying the ship.
Boeing’s woes are tied directly to a strike that has been ongoing since September 14, with about 33,000 union machinists from the International Association of Machinists and Aerospace Workers walking off the job. The strike has stalled production of Boeing’s most popular aircraft models, including the 737 Max, the 777X, and the 767, leading to a significant loss of revenue. The shutdown has placed Boeing in an even more precarious position, as it typically receives a large portion of payment from airline customers upon delivery of these planes.
Two days of talks aimed at resolving the strike ended without an agreement, pushing Boeing to file an unfair labor practices charge against the union. With the production lines halted, Boeing’s financial bleeding has only worsened, and the need for immediate cost-cutting measures, including layoffs, has become inevitable.
Boeing’s financial health has been in freefall, with the company reporting over $25 billion in losses since 2019. The strike is just the latest blow in a series of setbacks for the company, which has faced mounting scrutiny from both the Federal Aviation Administration (FAA) and NASA over safety issues and delayed projects. The company revealed it had burned through $1.3 billion in cash during the third quarter of this year alone and reported a staggering loss of $9.97 per share.
The third-quarter report highlighted significant financial write-downs, including a $2.6 billion charge related to further delays of the 777X, $400 million in losses on the 767, and another $2 billion tied to defense and space programs, including the new Air Force One jets and a NASA space capsule. With these massive losses, Boeing’s stock has taken a beating, and investors are growing increasingly wary of the company’s future.
Boeing had previously enacted rolling temporary furloughs in an attempt to manage costs, but Ortberg has announced these measures will be suspended as the layoffs loom.
With the financial and operational outlook grim, Ortberg’s memo was candid about the road ahead. “Our business is in a difficult position, and it is hard to overstate the challenges we face together,” Ortberg said, making clear that Boeing will have to make tough, structural changes to remain competitive in the long term. His message underscores the gravity of the situation, as Boeing fights to retain its status as a leader in the aerospace industry amid growing competition and rising costs.
As Boeing delays the launch of its new 777X aircraft to 2026 and halts the production of its cargo version of the 767 by 2027, the company is betting on long-term recovery strategies. However, these measures may not be enough to reassure shareholders or win back customers.
Boeing’s challenges extend far beyond labor disputes and financial losses. The company has faced increased scrutiny from the FAA following the well-publicized failures of its 737 Max, which was grounded for over a year after two fatal crashes claimed the lives of 346 people. Though Boeing has agreed to plead guilty to conspiracy charges and pay fines, many are calling for harsher penalties.
Additionally, Boeing recently suffered another embarrassment when NASA determined that its spacecraft wasn’t safe enough to transport astronauts back from the International Space Station. With its reputation still tarnished by past safety failures, Boeing now faces an uphill battle to rebuild trust with regulators, customers, and investors alike.
For now, the beleaguered aerospace giant is clinging to the hope that cost-cutting measures, including layoffs, and future projects will allow it to regain its footing. However, with mounting challenges on all fronts, the future of Boeing remains deeply uncertain.
