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Boeing plans to lay off 10% of its workforce, around 17,000 employees, and reduce production due to an ongoing labor union strike, according to a Fox Business report.
CEO Kelly Ortberg, who took over in August, sent a memo to staff stating that the layoffs would affect executives, managers, and employees.
“Our business is in a difficult position, and it is hard to overstate the challenges we face together,” Ortberg told staff, saying that the situation “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.”
Boeing, which employs about 170,000 people globally, saw its shares drop 1.1% in after-hours trading. The company announced it will end producing its 767 aircraft in 2027 after fulfilling orders for 29 jets. Additionally, Boeing delayed the rollout of its 777X to 2026 due to a defective part that grounded test flights earlier this year.
Boeing is grappling with a month-long strike involving over 33,000 Seattle-area workers. The strike has halted production of the 737 Max, 777, and 767. The 787 is still being produced at a nonunion plant in South Carolina. The strike began after workers rejected tentative contract offers, with their main demand being a 40% pay raise from the company.
“Striking workers who temporarily do not have a paycheck do not want to become unemployed workers who permanently do not have a paycheck,” said Thomas Hayes, an equity manager at Great Hill Capital. “I would estimate the strike will be resolved within a week as these workers do not want to find themselves in the next batch of 17,000 cuts.”
Boeing will cut 10% of its workforce, or about 17,000 people, as the company’s losses mount and a machinist strike that has idled its aircraft factories enters its fifth week.
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