Boeing Co. announced it would lay off 17,000 employees, as the company aims to reduce costs during a period of continuous losses caused by employee strikes and production halts.
The layoff will affect Boeing employees across all levels, in an attempt toward a more sustainable cost structure. Boeing CEO Kelly Ortberg announced the restructuring effort in a statement issued on Oct. 11.
“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 said. “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.”
After Ortberg’s call for improvement, Boeing’s stock price has fallen 40% since the start of this year. This decline follows continuous quality and safety failures, which Ortberg began to address only this August.
The news came with a flurry of unfortunate production changes, the first being the announcement of delivery delays to customers, specifically with the 777X jet, which was one of many aircrafts whose production was halted following the International Association of Machinists and Aerospace Workers strike. The company now expects its first delivery by 2026, which is one year later than previously predicted.
Ortberg also wrote about ending production of the 767 Freighters once its current orders are completed and delivered, which he anticipates will happen in 2027. This model was intended to transport large amounts of cargo.
Boeing also predicted losses in its military and space division, Boeing Defense, Space & Security with most of the developments within the division priced at fixed amounts. The IAM, whose negotiations with Boeing have just broken down, responded critically to the message in a statement on its website.
“CEO Ortberg has an opportunity to do things differently instead of the same old tired labor relations threats used to intimidate and crush anyone that stands up to them,” the union said in the statement.
Boeing Chief Operating Officer Stephanie Pope had a different characterization of negotiations. She wrote that the union did not “seriously consider” their proposals.
“Instead, the union made non-negotiable demands far in excess of what can be accepted if we are to remain competitive as a business,” Pope said. “Given that position, further negotiations do not make sense at this point and our offer has been withdrawn.”
