New CEO Kelly Ortberg announced to staff in a memo Friday that the job cuts, which could total about 17,000 positions, will affect executives, managers and employees.
The company has approximately 170,000 employees worldwide, many of whom work in manufacturing facilities in Washington and South Carolina.
Boeing had already imposed phased temporary furloughs, but Ortberg said those would be suspended because of the impending layoffs. The company will delay the launch of a new plane, the 777X, to 2026 instead of 2025. It will also stop construction of the freighter version of its 767 in 2027 after completing current orders.
Boeing has lost more than US$25 billion since the start of 2019.
About 33,000 unionized machinists have been on strike since September 14. Two days of negotiations this week failed to reach an agreement, and Boeing filed an unfair labor practice complaint against the International Association of Machinists and Aerospace Workers.
As the company announced layoffs, Boeing also provided a preliminary report on its third-quarter financial results — and the news isn’t good.
Boeing said it burned US$1.3 billion in cash during the quarter and lost US$9.97 per share. Industry analysts expected the company to lose US$1.61 per share in the quarter, according to a FactSet survey, but were likely unaware of some significant writedowns Boeing announced on Friday.
The Arlington, Virginia-based company said it had US$10.5 billion in cash and marketable securities as of September 30.
The strike has a direct impact on cash burn because Boeing gets half or more of the price of the planes when it delivers them to airline customers. The strike ended production of the 737 Max, Boeing’s best-selling plane, as well as the 777X and 767. The company still makes 787s at a non-union factory in South Carolina.
“Our company is in a difficult situation, and it is difficult to overestimate the challenges we face together,” Mr. Ortberg told staff. He said the situation “requires difficult decisions and we will need to make structural changes to ensure we can remain competitive and meet our customers’ expectations over the long term.”
