Boeing to cut 10% of workforce, suspends most 767 production amid labor union strike

0 2 2 minutes read

Boeing to cut 10% of workforce, suspends most 767 production amid labor union strike

Third Bridge global analyst Peter McNally discusses how the Boeing factory strike is impacting the business on ‘The Big Money Show.’

Boeing said it is issuing layoff notices to employees included in the broader aerospace workforce reduction plan.

About 17,000 workers involved in the scheme were notified this week and are expected to leave the company by mid-January, Boeing said. The reduction, which comes after a union strike, is estimated at 10% of its workforce.

“We are adjusting our staffing levels to align with our financial reality and a more focused set of priorities,” Boeing said in a statement sent to FOX Business.

CEO Kelly Ortberg, who took over in August, told employees in a memo last month that the job cuts would include executives, managers and employees.

Boeing CEO Kelly Ortberg took over in August. (Daniel Acker/Bloomberg via Getty Images/Getty Images)

“Our business is in a difficult situation, and it is difficult to overstate the challenges we face together,” Ortberg told employees, saying that this situation “requires serious decisions, and we will have to make structural changes to ensure that we remain competitive and deliver to our customers in the long term.”

The company has approximately 170,000 employees worldwide, most of whom work in manufacturing facilities in South Carolina and Washington state.

BOEING CEO CLOSES $4.1M SETTLE HOME STRIKE AMID FACTORY WORKERS’ STRIKE: ‘YET TO PAY US’

The fuselage and one of the engines of a Boeing 777-9 aircraft on the tarmac. (Giuseppe Cacace/AFP via Getty Images/Getty Images)

The company also announced the end of production of its 767 aircraft in 2027, after it completed current orders for 29 jets.

BOEING WORKERS VOTE TO STRIKE AFTER MEMBERS’ CONTRACT RULES

They also delayed the release of its new 777X to 2026, instead of 2025. The delay comes after the recent discovery of a defective part that halted test flights earlier this year.

A Boeing worker raises his fist during a union strike

Boeing workers in Seattle voted overwhelmingly to strike on Sept. 12, rejecting a contract for the embattled aerospace giant that was seen as a boon for workers given the company’s dire financial situation. (Jason Redmond/AFP via Getty Images/Getty Images)

The aerospace company faced a strike involving 33,000 workers in the Seattle area. The strike halted production of the 737 Max, Boeing’s best-selling plane, as well as the 777s and 767s. This strike was caused after the workers rejected the contract negotiations which had not yet been started by the company.

Max is a major revenue generator for a company that raised more than $24 billion in late October to shore up its faltering finances and protect its investment-grade rating following concerns from rating agencies.

Boeing went from crisis to crisis this year, starting Jan. 5 when the door panel blew the 737 Max out of the air. Since then, its CEO has left, its production has dropped as regulators investigate its safety culture, and its largest union went on strike on September 13.

The end of the strike on Nov. 5 and the return of Boeing workers this week to the company’s Seattle-area lines now support a gradual revival of Max production.