Boeing is planning to reduce its workforce by approximately 10%, which equates to around 17,000 jobs, according to an email sent to employees by President and CEO Kelly Ortberg, Reuters reports.
The layoffs, set to occur over the next few months, will affect executives, managers, and employees across the company. Leadership teams will provide additional details about the specific impacts of the layoffs next week.
Boeing Faces Year of Challenges
This decision follows a series of significant challenges for Boeing. In January, the company grounded its 737 Max planes after an incident where a hole was discovered mid-flight. Later in the year, Boeing accepted a guilty plea related to 737 Max crashes in 2018 and 2019 that resulted in over 300 fatalities. Additionally, Boeing’s Starliner spacecraft experienced issues after carrying NASA astronauts to the International Space Station in June, forcing its return without astronauts. Since mid-September, more than 30,000 Boeing factory workers have also been on strike.
Ortberg emphasized that Boeing’s leadership had no choice but to implement these workforce reductions due to the company’s current financial state and the challenges it faces. He acknowledged the difficulties these layoffs would cause employees and their families but stated that the decision is necessary for the company’s long-term recovery.
Along with the workforce reductions, Boeing has delayed the delivery of its 777X airplane until 2026. The company also plans to complete production on the remaining 767 Freighters ordered by customers before ending the program in 2027. Production of the KC-46A Tanker will continue.
Boeing’s defense division, Boeing Defense, Space & Security (BDS), is facing significant losses, with Ortberg pointing to work stoppages and challenges on commercial derivative programs. He noted that Boeing expects substantial new losses in BDS this quarter. Ortberg plans to increase oversight of the division to address these issues.
In his memo to staff, Ortberg reassured employees that despite these layoffs, Boeing remains committed to maintaining safety, quality, and customer service. The company will also be transparent about the timing and impact of the workforce reductions, while ensuring professionalism and support for those affected.
Featured Image courtesy of PETER CZIBORRA/REUTERS
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