Boeing will cut 10% of its workforce, or about 17,000 people, as the company’s losses mount and a machinist strike that has idled its aircraft factories enters its fifth week.
Boeing expects to report a loss of an $9.97 a share in the third quarter, the company said in a surprise release on Friday. It took charges in both its commercial airplane unit and defense business.
The manufacturer also won’t deliver its still-uncertified 777X wide-body plane until 2026, putting it six years behind schedule, and will stop making commercial 767s in 2027, CEO Kelly Ortberg said in a staff memo on Friday afternoon.
“Our business is in a difficult position, and it is hard to overstate the challenges we face together,” Ortberg said. “Beyond navigating our current environment, restoring our company 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.”
The job and cost cuts are the most dramatic moves to date from Ortberg, who is just over two months into his tenure in the top job.
He was tasked with restoring Boeing after safety and manufacturing crises, but the labor strike has been the biggest challenge yet for Ortberg. Credit ratings agencies have warned the company is at risk of losing its investment-grade rating, and Boeing has been burning through cash in what company leaders hoped would be a turnaround year.
S&P Global Ratings said earlier this week that Boeing is losing more than $1 billion a month from the strike, which began Sept. 13 after machinists overwhelmingly voted down a tentative agreement the company reached with the union. Tensions have been rising between the manufacturer and the union, and Boeing withdrew a contract offer earlier this week.