Boeing, the troubled aircraft maker, has revealed its intention to reduce its total staff by 10% in the coming months. The decision comes as the company grapples with significant financial losses, safety issues, and regulatory scrutiny.
The CEO of Boeing addressed employees, emphasizing the difficult position the company is in and the need for structural changes to ensure long-term competitiveness and customer satisfaction. While the exact number of job cuts was not specified, Boeing had 171,000 employees globally at the beginning of the year, with a majority based in the United States.
Boeing has faced a series of challenges over the past five years, including the grounding of its 737 Max aircraft following two fatal crashes. Recent incidents, such as a door plug detachment on a 737 Max flight, have raised further safety concerns and triggered federal investigations.
In response to ongoing financial pressures, Boeing had implemented rolling unpaid furloughs for nonunion employees during a strike by the International Association of Machinists union. However, the decision to lay off employees means that the furlough cycle will not continue.
Despite its financial struggles, Boeing remains a key player in the aerospace industry, with a substantial order backlog that extends years into the future. The company's only major competitor, Airbus, lacks the capacity to absorb Boeing's orders, providing some stability amidst Boeing's challenges.
As part of its restructuring efforts, Boeing will discontinue the production of the 767 jet once current orders are fulfilled in 2027. Additionally, delays in the development of the 777X widebody passenger plane have been announced, with first delivery now expected in 2026.
Boeing's CEO acknowledged the impact of these decisions on employees and their families, emphasizing the necessity of tough actions for the company's future recovery. The company's debt has surged in recent years, raising concerns about a potential credit rating downgrade.
