Boeing to cut 17,000 jobs and delay first 777X delivery as strike hits finances

Boeing to cut 17,000 jobs, delay 777X delivery, and expects losses due to strike, CEO Ortberg announces.

Boeing will cut 17,000 jobs, delay the first deliveries of its 777X jet by a year and record $5 billion in losses in the third quarter, as the U.S. planemaker continues to spiral during a month-long strike. Boeing CEO Kelly Ortberg said in a message to employees that the company must shrink its workforce “to align with our financial reality” after an ongoing strike by 33,000 U.S. West Coast workers shuttered production of its 737 MAX, 767 and 777 jets.

“We reset our workforce levels to align with our financial reality and to a more focused set of priorities. Over the coming months, we are planning to reduce the size of our total workforce by roughly 10%. These reductions will include executives, managers and employees,” Mr. Ortberg’s message said.

Boeing shares fell 1.7% in after-market trading.

Boeing recorded charges totaling $5 billion for its defence and commercial businesses.

Reaching a deal to end the work stoppage is critical for Boeing, which filed an unfair-labour-practice charge on Wednesday accusing the machinists union of failing to bargain in good faith. Ratings agency S&P estimated the strike is costing it $1 billion a month and it is at risk of losing its prized investment-grade credit rating. Mr. Ortberg also said Boeing has notified customers that the company now expects the first delivery of its 777X in 2026 due to the challenges Boeing has faced in development, as well as from the flight-test pause and ongoing work stoppage. Boeing had already faced issues with certification of the 777X that had significantly delayed the plane’s launch.

Boeing, which reports its third-quarter earnings on Oct. 23, said in a separate release it now expects revenue of $17.8 billion, a loss per share of $9.97, and negative operating cash flow of $1.3 billion.

“While our business is facing near-term challenges, we are making important strategic decisions for our future and have a clear view on the work we must do to restore our company,” Mr. Ortberg added in a statement.