777X comes later
Boeing is cutting ten percent of jobs
October 12, 2024, 1:54 a.m
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Boeing plans to lay off one in ten employees in the coming months. The leadership team is also affected. But that’s not all the bad news.
In the midst of a collective bargaining dispute, the ailing US aircraft manufacturer Boeing has announced a reduction of ten percent of its workforce, meaning around 17,000 jobs. The head of Airbus’ competitor, Kelly Ortberg, said in a letter to employees that the aircraft manufacturer had to adapt the personnel situation to the “financial realities”. “These cuts will include executives, managers and employees.”
In addition, the first delivery of the 777X jet will be delayed by a year. The first orders will therefore not reach customers until 2026. New, significant losses are to be expected in the arms business.
Looking ahead to its results expected on October 23, the company reported a third-quarter loss per share of $9.97 on revenue of $17.8 billion, almost a billion less than expected. Boeing shares initially fell 2.3 percent in after-hours trading.
Collective bargaining broke off
The traditional US company is affected by a strike by 33,000 workers on the West Coast. The labor dispute has been going on since September 13th and, according to estimates by the rating agency S&P, is costing Boeing a billion dollars a month.
In the middle of the week, Boeing withdrew its improved offer in the collective bargaining dispute with employees and broke off negotiations. The union of striking factory workers on the US West Coast is demanding a pay increase of 40 percent over four years and the restoration of a defined benefit pension that was removed from the contract a decade ago. In September, employers offered to increase general wages by 30 percent over four years. Boeing also wants to reintroduce a performance bonus and improve pension benefits, among other things.
Boeing recently posted deep red numbers and is $60 billion in debt. The group’s management team is also under pressure due to a number of technical problems. At the beginning of the year, part of the cabin wall of an Alaska Airlines Boeing 737 MAX-9 came loose mid-flight. The arms business is also in trouble – the division recently lost billions. The company also struggles with chronic delivery delays.