Boeing is set to cut 17,000 jobs—10% of its global workforce—delay the first deliveries of its 777X jet by a year, and record $5 billion in losses in the third quarter as the US planemaker grapples with the impact of a month-long strike.
CEO Kelly Ortberg, in a message to employees, explained that the significant downsizing is necessary "to align with our financial reality" after a strike by 33,000 US West Coast workers halted production of Boeing's 737 MAX, 767, and 777 jets.
"We are resetting our workforce levels to match our financial reality and to focus on key priorities. Over the coming months, we plan to reduce our total workforce by approximately 10%, including executives, managers, and employees," Ortberg said.
Following the announcement, Boeing shares fell 1.1% in after-hours trading.
These sweeping changes are a major move by Ortberg, who took the helm in August, with a promise to improve relations with the union and its employees.
Boeing has recorded pre-tax earnings charges totaling $5 billion for its defense business and two commercial plane programs. On Sept. 20, Boeing replaced Ted Colbert, the head of its troubled space and defense unit.
