Boeing delays 777X launch and lays off 10% of workforce

Skift take

Boeing CEO Kelly Ortberg told employees that the company had to make “tough decisions” during the machinists’ strike.

Meghna Maharishi

Boeing CEO Kelly Ortberg told employees Friday afternoon that the company would have to postpone the launch of the 777X and lay off about 10% of its workforce as the machinists' strike continued.

“Our company is in a difficult situation and the challenges we face together can hardly be overstated,” Ortberg said in the statement.

The 777X was originally scheduled to launch in 2025, but due to the strike and a pause in flight testing, the first delivery is now expected in 2026. Ortberg said Boeing notified all customers of the 777X delay.

Some of the well-known airlines that have ordered 777X include Emirates, Lufthansa, Qatar Airways, Etihad and Singapore Airlines. However, many airline executives were already not confident that the 777X could have been delivered in 2025.

According to Bloomberg, Emirates President Sir Tim Clark previously said he believed the 777X would not enter service until 2026. The Dubai-based airline currently has the largest order for the 777X at 205 aircraft, according to Boeing figures from September.

“We have a business to run and if we have to foot the bill for overhauling all these planes, it should be blamed on Boeing,” Clark said at IATA’s annual general meeting in June. “Because there would be a six-year delay before we get our first aircraft.”

The aircraft manufacturer is also discontinuing the 767 cargo plane.

US Airlines are planning delays

So far, U.S. airline executives have said they are not currently affected by the machinists' strike. United Airlines Chief Commercial Officer Andrew Nocella said at the Skift Global Forum in September that the airline had introduced an insurance plan this year to address delivery delays.

“For now, we have enough aircraft available for the planned flight schedules and hope that Boeing and its people can resolve their problems as quickly as possible,” Nocella said.

Southwest Airlines, which operates an all-737 fleet, is also introducing red-eye flights, limiting hiring and making service cuts to deal with delivery delays.

Boeing is making significant staff cuts

Ortberg said Boeing will lay off 10% of its workforce, which would be about 17,000 employees. These cuts affect executives, managers and employees.

The company previously furloughed thousands of employees and froze hiring. Ortberg said Boeing would end furloughs due to the layoffs.

“We also need to focus our resources on performance and innovation in the areas that are core to us, rather than spreading ourselves across too many efforts that can often lead to poor performance and under-investment,” Ortberg said in the statement from Friday.

Talks with the International Association of Machinists and Aerospace Workers collapsed this week when Boeing withdrew its offer of a 30% pay increase over four years. The union demanded a 40% increase.

“Beyond addressing our current environment, recovering our business requires difficult decisions and we must make structural changes to ensure we remain competitive and able to deliver to our customers over the long term,” Ortberg said.