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 will lay off 10% of its workforce, about 17,000 workers, in the coming months and reduce production amid an ongoing union strike.
Chief Executive Officer Kelly Ortberg, who took over as CEO in August, told employees in a memo Friday that the job cuts would include managers, supervisors and employees.
“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 shares were down 1.1% in after-market trading.
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 completing 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.
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 troubled aerospace company continued to face a month-long strike, involving more than 33,000 workers in the Seattle area. The strike shut down production of the 737 Max, Boeing’s best-selling plane, as well as 777s and 767s. The company still produces 787s in an illegal factory in South Carolina.
This strike was caused after the workers rejected the contract negotiations which had not yet been started by the company.
The main demand of the striking workers of the International Association of Machinists and Aerospace Workers’ Union (IAM) is a 40% wage increase.
| A ticker | Security | Finally | Change | Change % |
|---|---|---|---|---|
| BA | This company BOEING CO. | 151.03 | +4,36 |
+2.97% |
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Thomas Hayes, an equity manager at Great Hill Capital, said in an email that layoffs could put pressure on workers to end the strike.
“Striking workers who are temporarily without wages do not want to be unemployed workers who are not paid at all,” said Hayes. “I can estimate that the strike will be resolved within a week as these workers do not want to find themselves cut by 17,000.”
Fox News Digital’s Jasmine Baehr and Reuters contributed to this report.
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