Boeing to lay off 10 per cent of employees as factory strike cripples production
Boeing plans to lay off about 10 per cent of its workers in the coming months as it continues to lose money and tries to deal with a strike that is crippling production of the company’s best-selling airline planes. New chief executive Kelly Ortberg told staff in a memo on Friday that the job cuts [...]
Boeing plans to lay off about 10 per cent of its workers in the coming months as it continues to lose money and tries to deal with a strike that is crippling production of the company’s best-selling airline planes.
New chief executive Kelly Ortberg told staff in a memo on Friday that the job cuts will include executives, managers and employees.
The company has about 170,000 employees worldwide, many of them working in manufacturing facilities in the states of Washington and South Carolina.
Boeing had already imposed rolling temporary furloughs, but Ortberg said those will be suspended because of the impending layoffs.
The company will delay the rollout of a new plane, the 777X, to 2026 instead of 2025. It will also stop building the cargo version of its 767 jet in 2027 after finishing current orders.
Boeing has lost more than $25bn since the start of 2019.
About 33,000 union machinists have been on strike since 14 September. Two days of talks this week failed to produce a deal, and Boeing filed an unfair-labour-practices charge against the International Association of Machinists and Aerospace Workers.
As it announced layoffs, Boeing also gave a preliminary report on its third-quarter financial results — and the news is not good for the company.
Boeing said it burned through $1.3bn in cash during the quarter and lost $9.97 per share. Industry analysts had been expecting the company to lose $1.61 per share in the quarter, according to a FactSet survey, but analysts were likely unaware of some large write-downs that Boeing announced on Friday.
The company, based in Arlington, Virginia, said it had $10.5bn in cash and marketable securities on 30 September.
The strike has a direct bearing on cash burn because Boeing gets half or more of the price of planes when it delivers them to airline customers.
The strike has shut down production of the 737 Max, Boeing’s best-selling plane, as well as production of the 777x and 767s. The company is still making 787s at a non-union plant in South Carolina.
Ortberg told staff: “Our business is in a difficult position, and it is hard to overstate the challenges we face together.”
He said the situation “requires tough decisions and we will have to make structural changes to ensure we can stay competitive and deliver for our customers over the long term”.
David Keonig, Associated Press
