Aerospace giant announces significant layoffs and a major financial loss following a prolonged labor dispute. The company faced disruptions in production and escalating operational costs due to labor strikes, which impacted their ability to meet contractual deadlines.
An aerospace giant has announced that it will lay off 10% of its global workforce and delay the first deliveries of its 777X jet by a year. This decision comes as the company faces $5 billion in losses for the third quarter, largely due to the impact of a month-long strike by 33,000 U.S. West Coast workers. The strike has halted the production of key aircraft models, including the 737 MAX, 767, and 777 jets.
CEO Kelly Ortberg addressed employees, stating that the significant downsizing is necessary “to align with our financial reality.” The production stoppage caused by the ongoing labor dispute has severely affected the company’s operations and its ability to fulfill orders, contributing to the financial downturn.
These layoffs are part of broader cost-cutting measures aimed at mitigating the financial challenges caused by the strike. This move is seen as an attempt to stabilize financial health and regain investor confidence amid the ongoing challenges.
This production disruption has significantly impacted Boeing’s financial performance, leading to a projected cash burn of $3.8 billion for the quarter and $5 billion in losses. Additionally, Boeing shares have declined by more than 40% year-to-date on the New York Stock Exchange.
Ortberg noted that the company would focus on a more streamlined set of priorities as it navigates these financial pressures. The layoffs are expected to occur over the coming months as Boeing attempts to recover from the strike and ongoing financial struggles.
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