Boeing plans to cut 10% of its workforce and postpone the first deliveries of its 777X jet as strike action by 33,000 US West Coast workers continues.
The latest announcement comes after the US planemaker forecasted a $10 billion loss in 2024.
“Our business is in a difficult position, and it is hard to overstate the challenges we face together,” Boeing CEO, Kelly Ortberg said in a message to employees on October 11, 2024. “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.”
Ortberg also said that due to the challenges the company has faced in development as well as the flight-test pause and ongoing work stoppage, the delivery date for the first 777X aircraft has been pushed to 2026.
The 777X, the world’s largest and most efficient twin-engine jet, was initially expected to start commercial service in 2020, but its delivery has been delayed continuously over the last six years. During the Dubai Airshow 2023, Emirates CEO Tim Clark said he hoped to receive the first version, the B777-9, by October 2025.
In the message to employees, Boeing also announced that it will stop making the 767 freighter earlier than planned, ending more than 40 years of continuous production in Everett, Washington. Ortberg stated that Boeing plans to “build and deliver the remaining 767 freighters ordered by their customers and then conclude production of the commercial program in 2027”. However, production for the KC-46A Pegasus tanker will continue, the planemaker said.
Boeing also expects “substantial new losses” in Boeing Defense and Space (BDS) in the third quarter. BDS is Boeing’s subsidiary that handles defense and space projects, including the development, production, maintenance, and upgrade of fixed-wing and rotary-wing aircraft. These losses are “driven by the work stoppage on commercial derivatives, continued program challenges and our decision to complete production on the 767 freighter,” Ortberg continued.
The company also intends to cut its total workforce by around 10%, approximately 17,000 jobs, over the coming months, with job losses affecting executives, managers and employees. The planemaker will not be continuing with the next round of furloughs due to this decision, Ortberg added.
“We know these decisions will cause difficulty for you, your families and our team, and I sincerely wish we could avoid taking them,” Ortberg added. “However, the state of our business and our future recovery require tough actions.”
Union: “Machinists did not cause this by going on strike”
On October 12, 2024, the International Association of Machinists and Aerospace Workers (IAM), which represents the striking Boeing workers, replied to the changes in a post on X, stating that workers did not cause the situation by choosing to strike.
“Our 30-day strike is a direct outcome of poor decision-making by Boeing’s executives, who continue to disregard the voices of 33,000 of their workers,” the union said. “Boeing has the power to end this strike at any time. They know what it will take but have chosen not to act. This is on the company, not the IAM.”
Boeing has not yet decided when the new changes will take effect. IAM stated that it is prepared to restart negotiation talks at any time.
“Ortberg has a chance to do things differently this time rather than follow the same corporate playbook,” the union added.
On October 10, 2024, Boeing filed a complaint with the National Labor Relations Board (NLRB) alleging unfair labor practice, stating that Boeing factory workers engaged in “bad faith bargaining”. The decision to take action against the workers comes after recent two-day talks with the union on October 8–9, 2024, ended without a deal to end the strike.
