Boeing to cut 17,000 jobs and delay first 777X delivery as strike hits finances

Boeing is set to cut 17,000 jobs, approximately 10% of its global workforce, amid ongoing financial struggles and a month-long strike by 33,000 West Coast workers. The company is also delaying the first deliveries of its 777X jet by a year and expects to record $5 billion in losses for the third quarter of 2024.

Boeing CEO Kelly Ortberg addressed employees, stating that the job cuts are necessary to align the company's workforce with its financial reality. This downsizing will affect executives, managers, and general employees alike, as Boeing grapples with production halts of key aircraft models such as the 737 MAX, 767, and 777, due to the strike.

The strike, which began on September 13, has severely impacted Boeing’s production, and the company has filed an unfair labor practice charge against the machinists union for failing to negotiate in good faith. The financial strain from the work stoppage has been significant, with ratings agency S&P estimating that it is costing Boeing $1 billion per month, threatening the company’s prized investment-grade credit rating.

In addition to the layoffs, Boeing has delayed the delivery of its 777X jet to 2026, citing development challenges, flight-test pauses, and the ongoing strike. The company has also announced the end of its 767 freighter program by 2027, although it will continue producing the KC-46A Tanker.

Boeing faces further scrutiny as it awaits a Texas court decision on its offer to plead guilty to fraud as part of a deal with the U.S. Department of Justice. The planemaker has agreed to pay a $487.2 million fine, improve safety measures, and face three years of court-supervised probation.

Despite these setbacks, Boeing is exploring options to raise up to $10 billion through stock sales and other equity-like securities to stabilize its finances. The company currently has about $60 billion in debt and posted cash flow losses of over $7 billion in the first half of 2024. Analysts believe Boeing needs to raise between $10 billion and $15 billion to maintain its credit rating, which is now hovering just above junk status.