Boeing Cuts 10% of Jobs, Delays the 777X, Ends the 767F

DALLAS — Boeing has announced it is cutting 17,000 jobs, accounting for 10% of the workforce, delaying the 777X to 2026, and terminating the 767 commercial freighter program in 2027.

President and CEO Kelly Ortberg shared the following message with all employees today, "Our business is in a difficult position, and it is hard to overstate the challenges we face together. 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."

Ortberg added, "We need to be clear-eyed about the work we face and realistic about the time it will take to achieve key milestones on the path to recovery. We also need to focus our resources on performing and innovating in the areas that are core to who we are, rather than spreading ourselves across too many efforts that can often result in underperformance and underinvestment."

The Final Outcome

The terminations comes almost a month after Boeing announced a series of extensive cost-cutting measures in response to the 33,000-strong International Machinist Association (IAM) District 751 and District W24 strike.

At the time, Boeing said it might temporarily terminate certain employees, including managers and executives. The company reduced the workforce of dozens of engineering contractors, the majority of whom were experienced retirees who had returned to assist Boeing in resolving issues with aircraft still in development.

The cost-cutting measures also included substantial restrictions on the procurement of aircraft parts from suppliers, which would significantly impact the smaller aerospace companies in the region.

A week later, IAM union leaders refused to hold a vote on Boeing's "Best and Final Offer" (BAFO) to meet the manufacturer's deadline, citing logistical reasons for being unable to arrange a vote.

IAM’s District 751 president, Jon Holden, stated that the BAFO “could have been the start of meaningful discussion,” adding that while it was a start, there was no room for further discussion. Boeing would later back out of that offer.

The strike persisted, and the IAM union workers missed their first full paycheck and forfeited their employer-sponsored health insurance at the end of September. Today, member of congress call on Boeing management to return to the negotiating table.

Putting aside the Boeing 767F program termination and other non-commercial program losses, the extent to which the manufacturer can postpone the 777X without incurring a significant risk of losing critical customers remains to be determined.

Boeing expects to report third quarter revenue of US$17.8 billion, GAAP loss per share of US$9.97, and operating cash flow of US$1.3 billion. Cash and investments in marketable securities totaled US$10.5 billion at the end of the quarter.

Stay tuned to Airways for further developments.