THE Chief Executive of US aircraft manufacturer Boeing, Kelly Ortberg, said the company is to cut about 17,000 jobs and delay the first delivery of its 777X jet as it confronts deepening losses and the effects of a weeks-long strike by its largest labour union.
He made the announcement of the cuts, equivalent to 10 per cent of its workforce, in a message to staff: 'Our business is in a difficult position, and it is hard to overstate the challenges we face together.'
Financial troubles have escalated at boeing since the start of the year, when a door panel blew off one of its 737 Max jets on a passenger flight, reports London's Financial Times.
Regulators demanded a slowdown in manufacturing to fix quality problems, which reduced the amount of cash flowing into the company.
Last month, 33,000 workers walked out of Boeing plants in Washington state after members of the machinists' union overwhelmingly rejected a new contract.
The work stoppage halted production of the company's 767 and 777 planes, further cutting revenue, putting strain on its suppliers and customers.
In a separate statement after the market closed on Friday, Boeing warned investors that its third-quarter results, which are due on October 23, would 'recognize impacts' related to the strike as well as charges in its commercial and defence divisions.
The company said it had US$10.5 billion in cash and marketable securities at the end of September after burning through $1.3 billion in cash during the quarter. Losses for the period totalled nearly $10 a share, in part reflecting pre-tax charges of $5 billion in the quarter, including $3 billion on the 777X and 767 commercial plane programmes and $2 billion for its defence, space and security business.
Boeing said revenues for the quarter would come in at $17.8 billion, a figure that would fall short of analysts' expectations by about 3 per cent.
The machinists' strike came after union members turned down the company's offer of a 30 per cent pay increase. In an attempt to conserve cash, Boeing had begun stopping purchase orders with suppliers, freezing new hiring and furloughing tens of thousands of employees.
Mr Ortberg said that, because of the planned job cuts, the company would not proceed with the next round of furloughs.
Boeing needed 'to reset our workforce levels to align with our financial reality and to a more focused set of priorities', he said, adding that the cuts would include executives, managers and employees. Boeing had 171,000 employees at the end of 2023.
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He made the announcement of the cuts, equivalent to 10 per cent of its workforce, in a message to staff: 'Our business is in a difficult position, and it is hard to overstate the challenges we face together.'
Financial troubles have escalated at boeing since the start of the year, when a door panel blew off one of its 737 Max jets on a passenger flight, reports London's Financial Times.
Regulators demanded a slowdown in manufacturing to fix quality problems, which reduced the amount of cash flowing into the company.
Last month, 33,000 workers walked out of Boeing plants in Washington state after members of the machinists' union overwhelmingly rejected a new contract.
The work stoppage halted production of the company's 767 and 777 planes, further cutting revenue, putting strain on its suppliers and customers.
In a separate statement after the market closed on Friday, Boeing warned investors that its third-quarter results, which are due on October 23, would 'recognize impacts' related to the strike as well as charges in its commercial and defence divisions.
The company said it had US$10.5 billion in cash and marketable securities at the end of September after burning through $1.3 billion in cash during the quarter. Losses for the period totalled nearly $10 a share, in part reflecting pre-tax charges of $5 billion in the quarter, including $3 billion on the 777X and 767 commercial plane programmes and $2 billion for its defence, space and security business.
Boeing said revenues for the quarter would come in at $17.8 billion, a figure that would fall short of analysts' expectations by about 3 per cent.
The machinists' strike came after union members turned down the company's offer of a 30 per cent pay increase. In an attempt to conserve cash, Boeing had begun stopping purchase orders with suppliers, freezing new hiring and furloughing tens of thousands of employees.
Mr Ortberg said that, because of the planned job cuts, the company would not proceed with the next round of furloughs.
Boeing needed 'to reset our workforce levels to align with our financial reality and to a more focused set of priorities', he said, adding that the cuts would include executives, managers and employees. Boeing had 171,000 employees at the end of 2023.
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