Boeing to Cut Workforce by 10% as Strike Drains Financial Resources

Seattle, October 13 (FinanceFlashNews.com) – Boeing, the American aircraft manufacturer, plans to reduce its workforce by approximately 10% as the ongoing strike continues to worsen its financial situation. CEO Kelly Ortberg announced that the layoffs will affect senior management, managers, and regular employees. Boeing had around 171,000 employees at the end of 2023. This information comes from a Bloomberg report.

Preliminary data shows that Boeing expects third-quarter revenues of $17.8 billion and a loss per share of $9.97. The company also registered a free cash outflow of $1.8 billion for the period between July and September 2024. Since September 13, approximately 33,000 employees at Boeing’s main facilities in the Seattle area have been on strike, significantly disrupting production and draining cash.

Negotiations between Boeing and the International Association of Machinists and Aerospace Workers (IAM) have yet to produce an agreement. The union is demanding a 40% wage increase over four years and the restoration of defined benefit pensions, which were removed from the contract a decade ago. Despite Boeing’s improved offer of a 30% wage hike, the union rejected it, arguing that it still falls short.

The prolonged strike could cost Boeing billions of dollars, further exacerbating its financial strain. The company also faces a potential downgrade in its credit rating. This comes as Boeing is still recovering from a January incident where one of its 737-9 planes had to make an emergency landing due to a safety issue, prompting U.S. regulators to restrict production of the model.

Boeing has already initiated cost-cutting measures, including unpaid leave for some workers, a hiring freeze, and limits on corporate travel. The current round of unpaid leave is expected to end in late October.

Boeing Financial Data

Key words: Boeing, financial crisis, IAM, strike, credit rating, Kelly Ortberg