Boeing, the American aviation giant, faces serious challenges of thousands of job cuts, forcing the company to cut nearly 17,000 jobs, accounting for about 10% of its global workforce. This decision comes after months of financial strain and a costly strike by workers. CEO Kelly Ortberg addressed employees, explaining that these layoffs are necessary to align the company’s workforce with its financial reality.
The job cuts will impact Boeing employees across all levels, from executives to managers and regular staff. Ortberg stated that the company is resetting its priorities and adjusting its workforce accordingly to recover from recent setbacks.
Reasons Behind the Layoffs
This is not the first time Boeing has taken drastic cost-cutting measures. Recently, the company had announced temporary furloughs and a hiring freeze, aiming to cope with a prolonged strike involving 33,000 workers on the US West Coast. The strike affected production of major Boeing jets like the 737 MAX, 767, and 777.
Additionally, Boeing reported a $5 billion loss in the third quarter of the year, mainly due to the strike. The company’s finances are under severe pressure, with analysts predicting a quarterly cash burn of around negative $3.8 billion.
Impact of Financial Losses and Delays
Alongside the worker strike, Boeing has also faced delays in delivering its 777X jets, further adding to its financial woes. The company’s shares have fallen by over 40% on the New York Stock Exchange since the beginning of the year, indicating a significant loss in investor confidence.
Boeing has also forecasted a third-quarter revenue of $17.8 billion and a loss of $9.97 per share, underscoring the severity of the situation.
What Ahead for Boeing
The arrival of a new CEO at Boeing was initially seen as a hopeful change for the company’s internal relations and business recovery. However, with the ongoing financial difficulties, strikes, and production delays, Boeing’s path to recovery seems far from smooth. The layoffs are part of the company’s broader strategy to cut costs, but challenges still remain as it grapples with substantial losses and operational setbacks.
