October 12th 2024.
Boeing, one of the largest plane manufacturers in the world, has announced that it will be laying off 17,000 employees and delaying projects as it faces multiple challenges in its business. In an email to the staff, CEO Kelly Ortberg stated that these cuts are necessary to align with the company's financial reality. This means that roughly 10% of the total workforce will be affected, including executives, managers, and regular employees.
Ortberg also mentioned that the company will not be proceeding with the next cycle of furloughs, which were previously planned. This decision comes as a result of the need to reduce the workforce, as Boeing currently employs around 170,000 people worldwide. While acknowledging the impact these cuts will have on employees and their families, Ortberg emphasized that these tough actions are necessary for the future of the company.
Boeing's shares have been on a decline this year, dropping by 22.98% in the past year. This decline is partly due to concerns over the safety and quality of its aircraft, following incidents such as a cabin panel blowout and a problem spacecraft that left two NASA astronauts stranded in space. The company is set to release its third quarter results on October 23, with expected revenue of $17.8 billion and a GAAP loss per share of $14.77.
The ongoing strikes by the International Association of Machinists and Aerospace Workers have also impacted Boeing's performance, with more than 33,000 workers on strike for several weeks at factories in Washington, Oregon, and California. The workers rejected Boeing's tentative contract, which did not meet their demand for a 40% pay increase over three years. As a result, the delivery of Boeing's 777X aircraft will be delayed until 2026, and flight tests have also been put on pause.
Ortberg acknowledged that the company is facing a difficult position and that the challenges it is currently facing cannot be overstated. He emphasized the need for structural changes to ensure the company remains competitive and continues to deliver for its customers in the long term. In addition, Boeing has launched a WhatsApp channel to keep the public updated on the latest breaking news, celebrity updates, and sports news. This channel ensures that users can stay informed without worrying about their private details being shared or algorithms filtering the information they receive.
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