Boeing's new CEO announces 17,000 job cuts amid strikes, safety crisis
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The job cuts come amid a prolonged strike involving 33,000 workers in Washington and Oregon, which has halted production of Boeing's flagship jets, including the 737 Max, 767, and 777.
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The Boeing logo is displayed at the company's factory on Sept. 24, 2024, in Renton, Wash. (AP)
Boeing's new CEO, Kelly Ortberg, announced on Saturday a sweeping reduction of 17,000 jobs, or roughly 10% of the company's workforce, as the aerospace giant grapples with a crippling strike, ongoing safety concerns, and financial losses.
Ortberg cited the need for "tough decisions" and "structural changes" to align the company with the harsh economic realities it faces.
The job cuts come amid a prolonged strike involving 33,000 workers in Washington and Oregon, which has halted production of Boeing's flagship jets, including the 737 Max, 767, and 777.
Day 29 - Strike Update
— IAM Union District 751 (@IAM751) October 12, 2024
October 11, 2024
Boeing is attempting to bargain in the press. It won’t work, and it is detrimental to the bargaining process. Boeing is simply attempting the same old bargaining tactics. They are trying to deal directly with the membership and sow seeds… pic.twitter.com/S9cTRb4gJd
The one-month old strike is centered on a contentious pay dispute, and negotiations between the company and unions remain at a stalemate.
Ortberg noted that the layoffs would affect all levels of staff, including executives, managers, and production employees.
"We must reset our workforce levels to align with our financial reality," Ortberg said in a memo to employees.
"I sincerely wish we could avoid taking these actions, but the state of our business and our future recovery require tough decisions."
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The cuts come at a time of multiple crises for Boeing. In January, a cabin panel blowout during a flight of a newly built 737 Max raised fresh concerns about the safety and quality of the company's planes.
Boeing's defense division is also facing significant losses, compounded by the troubled mission of its Starliner spacecraft, which failed to achieve a full mission after landing without the two astronauts it was supposed to bring back from the International Space Station.
Boeing also announced a one-year delay in the first delivery of its 777X commercial jetliner, a key product in the company's portfolio, further adding to investor unease.
Shares of Boeing fell 1.6% in after-hours trading following the announcement.
Read more: Boeing needs to make 'significant changes':US Aviation chief
Despite the layoffs, Ortberg stressed that Boeing will maintain its focus on safety and quality moving forward.
"As we move through this process, we will maintain our steadfast focus on safety, quality, and delivering for our customers," he said.
Boeing employees will receive more details on how the layoffs will impact their specific departments in the coming days.
