NEW YORK — Boeing announced on Friday that it plans to cut 10 percent of its workforce as it projected a large third-quarter loss in the wake of a machinist strike in the Seattle region.
The aviation giant must “reset our workforce levels to align with our financial reality,” Chief Executive Kelly Ortberg said, adding that the cuts of 17,000 positions globally “will include executives, managers and employees.”
The company announced a series of belt-tightening measures and production delays in the wake of the nearly monthlong strike of 33,000 workers that has added to the company’s litany of problems.
Boeing staff with the International Association of Machinists and Aerospace Workers (IAM) walked off the job on September 13 after overwhelmingly rejecting a contract offer.
IAM officials did not immediately respond to a request for comment from Agence France-Presse (AFP).
Boeing, which has also faced significant scrutiny over commercial aviation safety lapses and stumbles in its Starliner space program, said the IAM strike contributed to $3 billion in pretax charges to its commercial aviation results in the third quarter, part of an anticipated loss of $9.97 per share.
“While our business is facing near-term challenges, we are making important strategic decisions for our future and have a clear view on the work we must do to restore our company,” Ortberg said in a press release.
“These decisive actions, along with key structural changes to our business, are necessary to remain competitive over the long term.”
Details of the cuts would come next week, he said.
As a result of the strike, Boeing said it is pushing back the first delivery of the 777X to 2026 from 2025. The much-delayed jet was originally supposed to enter service in January 2020.
The company plans to cease production of the 767 Freighter in 2027 once it completes production on current orders.
Ortberg also vowed to take “additional oversight” of Boeing’s troubled defense and space businesses, which will experience “substantial new losses” in the third quarter, he said in the message to employees.
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