Boeing announced plans to lay off around 10% of its workforce, or approximately 17,000 employees, amid ongoing financial losses and production setbacks caused by a strike involving union machinists, according to a memo from CEO Kelly Ortberg on Friday.
The job cuts will affect executives, managers, and general employees across the company’s facilities, primarily in Washington and South Carolina.
The strike, which has halted production of Boeing’s best-selling planes, began on September 14 and involves roughly 33,000 union machinists.
Negotiations this week failed to yield a resolution, and Boeing has filed an unfair labor practices charge against the International Association of Machinists and Aerospace Workers.
Boeing also announced delays to its 777X model, which is now expected to roll out in 2026.
It plans to cease production of the 767 cargo jet in 2027 after completing current orders.
The company has reported losing over $25 billion since 2019 and incurred significant third-quarter losses, burning through $1.3 billion in cash and posting a $9.97 loss per share.
The company reported nearly $58 billion in debt as of its last earnings statement in July, prior to the strike. The company is estimated to be losing more than $1 billion per month, according to a new S&P Global report.
“What’s looming deep in the background is that if Boeing cannot turn its affairs around, then bankruptcy, Chapter 11 restructuring of the company, is not something out of the question,” said Thomas Gilbert, University of Washington Associate Professor of Finance and Business Economics.
S&P has placed Boeing on CreditWatch negative, which reflects the increased likelihood of a downgrade if the strike continues toward the end of the year.
“The company being downgraded is a signal that the company’s ability to pay its debt is decreasing,” Gilbert said.
The layoffs and delays come as Boeing grapples with increased scrutiny from the Federal Aviation Administration and challenges to its space program, including a setback with NASA concerning the safety of Boeing spacecraft for astronaut transport.
Employees on the picket line told KIRO 7 the move did not change their position.
“We’re fighting until the end,” said employee Dan Anderson. “Either we’ll get a good contract, or maybe Boeing gets what they want and all the experience leaves and retires.”
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