Boeing said Friday that it would cut its workforce by 10%, further delay its 777X plane, and discontinue a freighter model as it deals with the financial fallout of an ongoing strike.
In a note to employees, CEO Kelly Ortberg said Boeing was in a "difficult position" and that "restoring our company requires tough decisions." The planemaker is mired in regulatory headaches after a January incident in which a door plug blew out of a 737 Max, as well as an ongoing strike.
Ortberg, who took over as CEO in August, said the workforce reduction included executives and manager-level positions. As of the end of 2023, Boeing had about 170,000 employees.
Other cost-cutting measures the company is taking include discontinuing the 767 cargo plane, Ortberg said.
Before the cost-cutting moves, analysts had estimated ballooning costs of up to $50 million a day as 33,000 workers remained on strike. The members of the International Association of Machinists and Aerospace Workers in Seattle have been on strike since September 13.
Talks between Boeing and the union collapsed earlier this week. The planemaker filed a National Labor Relations Board complaint against the union on Thursday. Prior to the layoffs, Boeing was taking other measures to cut costs during the strike, including asking some employees to take a one-week furlough every four weeks.
Among the most significant setbacks for Boeing is the 777X, first deliveries of which are now expected in 2026.
The 777X is Boeing's newest widebody plane, with 481 orders from more than a dozen global carriers, BI previously reported. But the latest plane is already five years behind schedule and has put Boeing at least $1.5 billion in the hole — and that's likely to deepen as the timeline gets pushed back at least another year.
With the planemaker already facing other 737 and 787-related problems, this new delay to the 777X program could further wane the industry's trust in Boeing and could push carriers to choose the already-in-service Airbus A350.
