Boeing President and Chief Executive Officer Kelly Ortberg announced a sweeping restructuring on Friday that will eliminate approximately 10% of the aerospace manufacturer's global workforce—around 17,000 jobs—over the coming months. In a message to employees, Ortberg stated that the reductions will span executives, managers, and rank-and-file workers as the company confronts mounting financial losses and a month-long strike by approximately 33,000 U.S. West Coast machinists.
Alongside the workforce reductions, Boeing notified customers that first delivery of its flagship 777X widebody jetliner has been pushed back by another year from 2025 to 2026, six years behind the aircraft's original schedule. The twin-aisle 777X program has faced certification hurdles, a temporary suspension of flight testing in August after a structural thrust link component issue was discovered, and factory work stoppages in Washington state.
777X Widebody Delayed to 2026 and Commercial 767 Freighter Output to End
As part of its product portfolio overhaul, Boeing also decided to end production of its commercial 767 freighter program in 2027 after completing the remaining 29 aircraft on order for cargo operators. However, assembly of the 767-based KC-46A Pegasus aerial refueling tanker for the U.S. Air Force and allied defense customers will continue uninterrupted.
In preliminary financial disclosures released ahead of its full third-quarter report on October 23, Boeing projected third-quarter revenue of $17.8 billion and a GAAP loss per share of $9.97. Operating cash outflow for the quarter reached $1.3 billion, leaving the company with $10.5 billion in cash and marketable securities at the end of September as credit rating agencies warn that Boeing's investment-grade rating is at risk.
“Our business is in a difficult position, and it is hard to overstate the challenges we face together. Restoring our company requires tough decisions and structural changes to stay competitive.” — Kelly Ortberg, President and Chief Executive Officer of Boeing
$5 Billion in Pre-Tax Charges as Machinists Strike Strains Liquidity
The preliminary results include $5 billion in combined pre-tax earnings charges across Boeing's two largest divisions. The Commercial Airplanes unit will record $3 billion in pre-tax charges—comprising $2.6 billion for the 777X program and $400 million for the 767 program—while the Defense, Space & Security division will book $2 billion in pre-tax charges tied to fixed-price development programs including the T-7A Red Hawk trainer and KC-46A tanker.
Contract negotiations between Boeing and the International Association of Machinists and Aerospace Workers (IAM) District 751 remain deadlocked after union talks broke down earlier in the week, keeping production of the cash-generating 737 MAX, 767, and 777 aircraft halted across the Puget Sound region. Ortberg emphasized that Boeing will not proceed with the next round of temporary employee furloughs now that permanent structural headcount reductions are underway.
Frequently Asked Questions
How many jobs is Boeing cutting in its restructuring plan?
Boeing is cutting approximately 10% of its global workforce, which equates to around 17,000 positions across executives, managers, and employees over the coming months.
When is the new expected delivery date for the Boeing 777X?
Boeing has delayed the first customer delivery of its 777X widebody jetliner from 2025 to 2026 due to flight testing pauses, certification challenges, and the ongoing machinists strike.
Comments (0)
Log in to join the discussion.