Boeing has now revealed plans to cut its workforce by 10% and delay the delivery of its highly anticipated widebody 777X aircraft. These moves come as the company grapples with ongoing labor disputes and financial pressures.
Embattled plane manufacturing giant Boeing has signaled that it will seek to reduce its total workforce by 10% in coming months. This will include upper level staff, with the manufacturer saying it will include executives and managers as well as employees.
The news follows this week’s failure of mediated negotiations to resolve strike action by thousands of US West Coast workers. A third round of mediated talks between Boeing and the IAM Machinists union failed to reach a compromise.
In a message to employees at the beginning of the week, CEO Commercial Airplanes Stephanie Pope said that Boeing would consider its next steps to preserve cashflow.
777X Program Delay: Another Setback
Boeing President and CEO Kelly Ortberg revealed the developments in a message to all employees on Friday 11 September.
Notable, Ortberg’s message announced a significant pushback in the delivery of its 777X aircraft. The company now expects the first delivery to take place in 2026. The timeline has been set back due to development challenges, a flight test pause, and the ongoing work stoppage.
This delay is a blow to Boeing’s plans to compete in the wide-body aircraft market and could now potentially impact customer relations and future orders.
A 10% Cutback in Workforce
The decision to reduce Boeing’s total workforce by approximately 10% over the coming months is a clear indication of the company’s dire situation.
This cut will affect employees across all levels, including executives and managers, and will mean the loss of around 17,000 jobs. The move aims to align the workforce with Boeing’s current financial reality and streamline operations to focus on core priorities.
Ortberg emphasized the difficulty of this decision in a message to employees, stating, “Our business is in a difficult position, and it is hard to overstate the challenges we face together.”
He added that structural changes are necessary to ensure the company’s long-term competitiveness and ability to deliver for customers. The announcement comes on the heels of failed mediation attempts between Boeing and the IAM Machinists union.
A third round of talks failed to reach a compromise, leaving thousands of machinists on strike. This ongoing labor dispute has undoubtedly contributed to the company’s decision to reduce its workforce and delay program deliveries.
Conclusion of 767 Freighter Program
Boeing also revealed plans to conclude production of the commercial 767 Freighter program in 2027, while continuing production of the KC-46A Tanker. The company expects substantial new losses in its Defense, Space & Security (BDS) division. This is driven by work stoppages on commercial derivatives and ongoing program challenges.
CEO Ortberg will be providing additional oversight of the BDS business and its programs to address these issues.
The Challenges Ahead
As Boeing navigates through these turbulent times, the company faces the dual challenge of maintaining focus on safety and quality while also implementing significant structural changes.
The road ahead will not be easy, but Boeing leadership maintains these steps are necessary to ensure the company’s long-term survival and success.
Ortberg concluded his message to employees with a note of cautious optimism. “We will navigate through this moment. We will re-focus our company, and we will restore trust with all those who depend on us.”
Stakeholders, including employees, customers, and investors, will be watching closely to see if these measures can help the company overcome its current challenges and emerge stronger on the other side.
The coming months will be crucial for Boeing as it works to regain its footing in the competitive aerospace industry. The fallout from the 777X program delays remains to be seen. It comes as another thorn in the side of a manufacturer already reeling from production delays and ongoing supply chain issues.
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