Oct. 11 (UPI) — Boeing will lay off 17,000 workers and delay the introduction of its 777X wide-body plane until 2026, CEO Kelly Ortberg revealed Friday amid an increasingly bitter five-week-old machinist strike.
Ortberg wrote in a company memo that Boeing will idle roughly 10% of its total workforce over a period of months, including executives, managers and employees.
Also in a surprise financial update on Friday, the company said it expects to report a loss of $9.97 per share in the third quarter with pretax charges of $3 billion for its commercial airplane unit and $2 billion for its defense business.
“Our business is in a difficult position, and it is hard to overstate the challenges we face together,” he wrote. “Beyond navigating our current environment, restoring our company requires tough decisions and we will have to make structural changes to ensure we can stay competitive and deliver for our customers over the long term.”
Citing “challenges we have faced in development” and the ongoing work stoppage, Ortberg said Boeing has notified its customers that delivery of the 777X aircraft has been pushed back to 2026. Boeing stopped flight tests of the still-uncertified jet in August after finding structural damage in one of the test models.
The manufacturer touts the 777X as the “world’s largest and most efficient” twin-engine passenger airplane that will use 10% less fuel and emissions with 10% lower operational costs than competitors, but customers have been waiting for its promised debut since 2020.
Ortberg also revealed Boeing will cease production of its 767 Freighters in 2027 after completing construction of those aircraft currently on order, while production of the KC-46A Tanker will continue.
Boeing Defense, Space & Security, meanwhile, will be hit with “substantial new losses” this quarter, “driven by the work stoppage on commercial derivatives, continued program challenges and our decision to complete production on the 767 freighter,” the CEO said.
“We know these decisions will cause difficulty for you, your families and our team, and I sincerely wish we could avoid taking them,” Ortberg wrote. “However, the state of our business and our future recovery require tough actions.”
Negotiations between the striking machinists and the company have steadily deteriorated in recent days. Talks broke down this week with both sides pointing the finger at the other for the current standoff.
Boeing said it withdrew its last offer and that further talks seemed pointless, while the International Association of Machinists and Aerospace Workers blamed the aircraft maker for refusing to budge on a range of issues from wages, retirement plans, vacation and sick leave.
Boeing on Thursday filed an unfair labor practice charge against the union accusing it of bargaining in bad faith.