Seattle, Washington – Boeing, the U.S. aircraft manufacturer, announced significant changes in response to ongoing financial challenges, including a workforce reduction of 17,000 employees, a one-year delay in the delivery of its 777X jet, and an anticipated $5 billion loss in the third quarter.
The decision to cut jobs comes as a result of a month-long strike by 33,000 workers on the U.S. West Coast, which has halted production of Boeing’s 737 MAX, 767, and 777 jets. CEO Kelly Ortberg emphasized the need to align the company’s workforce with its financial situation and strategic priorities, leading to a reduction of approximately 10% of the total workforce, including executives, managers, and employees.
Boeing’s pre-tax earnings charges of $5 billion include expenses related to its defense business and two commercial plane programs. Despite the challenges, Boeing reported better-than-expected negative operating cash flow of $1.3 billion for the quarter, although analysts had predicted a higher cash burn rate.
The ongoing strike has had substantial financial implications for Boeing, with estimates suggesting a cost of $1 billion per month. The company has also warned customers of delays in the delivery of its 777X jet, now expected in 2026 due to development challenges, flight-test pauses, and the work stoppage.
To address its financial situation, Boeing is considering various options to raise additional funds, such as selling stock and equity-like securities. The company, which has significant debt and operating cash flow losses, may need to raise between $10 billion and $15 billion to maintain its credit ratings.
The uncertainty surrounding Boeing’s financial outlook underscores the importance of resolving the strike promptly to mitigate further losses and secure the company’s long-term financial stability. As Boeing navigates these challenges, its strategic decisions moving forward will be crucial in determining the company’s future success.