About 17,000 Boeing workers are due to receive layoff notices this week as the manufacturer begins to reorganize the business in the effort to resolve its financial instability. Last month Boeing chief executive officer Kelly Ortberg issued a memo announcing a company-wide 10% workforce reduction, which is now expected to be implemented by mid-January.
Boeing has not posted an annual profit since 2018, the year that the design defects in the 737 MAX first appeared. It has totaled more than $25 billion in losses since then. It also has trouble producing aircraft to meet the thousands of outstanding orders for its commercial aircraft.
The job cuts will involve executives, managers, and regular employees across the company, both Boeing Commercial Airplanes and Boeing Defense, Space and Security – but not affected will be production-level workers involved in building aircraft. That means the downsizing will not affect the estimated 33,000 workers in Washington and Oregon who recently agreed to a new labor contract and ended their nearly two-month strike.
"Our business is in a difficult position, and it is hard to overstate the challenges we face together," wrote to all Boeing workers in his October message.
"We need to be clear-eyed about the work we face and realistic about the time it will take to achieve key milestones on the path to recovery," he added. "We also need to focus our resources on performing and innovating in the areas that are core to who we are, rather than spreading ourselves across too many efforts that can often result in underperformance and underinvestment."
In addition to the job cuts, Boeing will delay the first deliveries of its 777X aircraft, the updated twin-engine widebody jet that Boeing has promoted as “the world’s largest and most efficient twin-engine jet.” Boeing has booked more than 500 orders for the 777X, but the deliveries were initially planned for 2021 and have been postponed several times.
The first delivery for the 777X is now planned for 2026, according to Ortberg’s memo.
Also, Boeing will complete its order book for the 767 Freighter aircraft and cease production of that model in 2027. It will continue to manufacture the KC-46A Tanker, a military aircraft based on the 767.
Ortberg reported that Boeing Defense’s “performance on fixed-price development programs is simply not where it needs to be,” and he indicated the 3Q results for the unit will be impacted by work stoppage for military programs based on commercial aircraft platforms.
