Boeing to lay off 17,000 employees, or 10% of its total workforce, as losses deepen during factory strike

Boeing is set to cut 10% of its workforce, about 17,000 employees, as it faces mounting losses and an ongoing machinist strike that has halted aircraft production for five weeks. The news comes less than a month after the beleaguered aerospace giant was ‘humiliated’ when upstart rival SpaceX stepped in to rescue stranded Boeing astronauts stuck in space after engine failure.

In a surprise announcement on Friday, Boeing forecast a third-quarter loss of $9.97 per share due to financial hits in both its commercial airplane and defense divisions, CNBC reported.

Adding to its challenges, Boeing has delayed the delivery of its 777X wide-body plane until 2026, six years behind schedule. The company also plans to stop producing its commercial 767 aircraft in 2027, according to a memo from CEO Kelly Ortberg sent to staff on Friday.

“Our business is in a difficult position, and it is hard to overstate the challenges we face together,” Ortberg said. “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.”

These workforce reductions and cost-cutting measures mark the most significant steps taken by Ortberg, who has been in the CEO role for just over two months. Tasked with steering Boeing out of safety and manufacturing crises, Ortberg now faces the additional burden of a prolonged labor strike.

The strike, which began on September 13 after machinists rejected a proposed agreement, has severely impacted Boeing’s operations. The company has been burning through cash, and credit rating agencies have warned it may lose its investment-grade status. S&P Global Ratings reported earlier this week that the strike is costing Boeing over $1 billion each month.

Tensions between Boeing and the union have escalated, with the company withdrawing its contract offer earlier this week as negotiations stalled. Early this year, a Boeing whistleblower was found dead in a truck after the US Department of Justice opened a criminal investigation into Alaska Airlines 737 Max blowout.

Boeing’s decision to downsize follows a broader trend among tech giants. Earlier this month, Intel revealed plans to lay off 17,500 employees, accounting for more than 15% of its workforce, as it tries to revive its struggling semiconductor business. Apple also cut 100 jobs in digital services in August.