Boeing Cuts 17,000 Jobs Amid Escalating Financial Woes

Boeing is cutting 17,000 jobs as part of a strategy to address deepening financial problems, CEO Kelly Ortberg announced in a memo to employees. The layoffs come at a time when the aerospace giant faces significant financial pressure and labor disputes.

Ortberg acknowledged the difficulties ahead, stating, “Our business is in a difficult position, and it is hard to overstate the challenges we face together.” The layoffs are seen as a necessary step to help stabilize the company.

The job cuts follow a strike by the International Association of Machinists and Aerospace Workers District 751, which represents nearly 33,000 Boeing employees. The union rejected Boeing’s offer of a 25% wage increase over four years, instead demanding a 40% increase. The ongoing strike, now nearly a month long, is reportedly costing Boeing close to $1 billion per month in lost productivity.

As a result of these financial pressures, Boeing had previously implemented one-week furloughs for employees, but Ortberg indicated that the furlough cycle would come to an end with these layoffs. The strike and resulting financial strain have forced the company to make tough decisions about its future.

Ortberg became Boeing’s CEO in August after the company faced congressional inquiries and pled guilty for its role in two 737 Max crashes. Since then, Boeing’s financial troubles have only worsened, with the company losing $25 billion over the past five years. In the third quarter alone, Boeing’s stock price dropped by nearly $10 per share, highlighting the urgent need for cost-cutting measures.

The layoffs are expected to impact a significant portion of Boeing’s workforce, with additional cuts potentially on the horizon if the company’s financial situation doesn’t improve. Boeing is under increasing pressure to turn things around as it navigates labor disputes, financial losses, and the fallout from past controversies.