Boeing will cut 17,000 jobs and delay deliveries of the first 777X as the strike hurts finances

By Allison Lampert, David Shepardson

(Reuters) – Boeing will cut 17,000 jobs, delay initial deliveries of its 777X jet by a year and post $5 billion in third-quarter losses as the U.S. plane maker remains reeling during a month-long strike .

Boeing CEO Kelly Ortberg said in a message to employees that the company must reduce its workforce “to adapt to our financial reality” after a sustained strike by 33,000 workers on the U.S. West Coast halted production of its 737 jets MAX, 767 and 777 had discontinued.

“We have adjusted our workforce strengths to align with our financial reality and set more targeted priorities. In the coming months, we plan to reduce the size of our total workforce by approximately 10 percent. These cuts will include executives, managers and employees,” Ortberg’s statement said.

Boeing shares fell 1.7% in after-hours trading.

Boeing recorded charges totaling $5 billion across its defense and transportation businesses.

Reaching an agreement to end the work stoppage is critical for Boeing. The company filed an unfair labor practices lawsuit Wednesday, accusing the machinists union of failing to negotiate in good faith. Ratings agency S&P estimated that the strike is costing the company $1 billion a month and puts the company at risk of losing its coveted investment-grade credit rating.

Ortberg also said Boeing has informed customers that the company now expects the first delivery of its 777X in 2026 due to the challenges Boeing faced in development, as well as the pause in flight testing and the ongoing work stoppage. Boeing had already had problems with the certification of the 777X, which had significantly delayed the plane's takeoff.

Boeing, which reports its third-quarter results on Oct. 23, said in a separate news release that it now reported revenue of $17.8 billion, a loss per share of $9.97 and a negative expected operating cash flow of $1.3 billion.

“As our company faces near-term challenges, we are making important strategic decisions for our future and have a clear vision of the work we must do to restore our company,” Ortberg added in a statement.

Boeing will end its 767 freighter program in 2027 when the remaining 29 aircraft on order are completed and delivered, but production of the KC-46A tanker will continue.

In light of the job cuts, the company said it would end a furlough program for employees announced in September.

Even before the strike began on Sept. 13, the company had been burning cash as it struggled to recover from a mishap on a new plane in January that exposed weak safety protocols and prompted U.S. regulators to cut production .

The story continues

Reuters reported this week that Boeing is exploring options to raise billions of dollars by selling stocks and equity-related securities.

According to the sources, these options include the sale of common shares as well as securities such as mandatory convertible bonds and preferred shares. One of the sources said she had suggested Boeing raise around $10 billion.

The company has about $60 billion in debt and reported an operating cash flow loss of more than $7 billion in the first half of 2024.

Analysts estimate Boeing would need to raise between $10 billion and $15 billion to maintain its ratings, which are now one notch above junk.

(Reporting by Allison Lampert and David Shepardson; Editing by Rod Nickel)