Boeing lays off 10% of its employees and delays the delivery of the first 777X aircraft – DW – 10/12/2024

American aerospace company Boeing announced on Friday that it plans to cut 17,000 jobs, or 10% of its global workforce, as it expects a significant loss for the third quarter after a mechanics strike in the Seattle area.

Boeing workers affiliated with the International Association of Machinists and Aerospace Workers left their jobs on September 13 after they overwhelmingly rejected a contract offer. The strike, in which 33,000 workers participated, led to the halt of production of Boeing 737 MAX, 767 and 777 aircraft.

CEO David Calhoun said the company needed to “realign our workforce to align with our financial reality,” adding that the cuts “will include executives, directors and employees.”

In a separate statement, Boeing, which reported third-quarter earnings on October 23, said it now expects revenue of $17.8 billion (16.3 billion euros), a loss per share of $9.97, and negative operating cash flow of $1.3 billion.

Delay in delivery of the 777X

Calhoun also said Boeing has informed customers that the company now expects to deliver the first 777X in 2026, rather than 2025. The delay is due to challenges Boeing has faced in development, as well as a temporary halt to flight testing and an ongoing strike.

Boeing has already faced certification issues for the 777X, which has significantly delayed the plane’s launch.

Reaching an agreement to end the strike is crucial for Boeing. Rating agency Standard & Poor’s estimates the strike is costing the company $1 billion a month and putting it at risk of losing its valuable investment-grade credit rating.

Even before the strike began on September 13, the company was burning cash as it struggled to recover from a mid-air panel explosion on a new plane last January, which exposed weak safety protocols and prompted US regulators to curb production.

dh/lo (AFP, Reuters)