Boeing to cut 10% of its workforce as embattled aviation giant announces another 777X jet delay

Boeing will cut about 17,000 jobs and delay the first deliveries of its 777X jet by a year, the U.S. planemaker said, as it faces a worker strike and fears for its safety record.

In addition to cutting 10% of its global workforce, the manufacturer said it would also discontinue the 767 cargo plane.

CEO Kelly Ortberg told employees the reduction was necessary “to align with our financial reality” in the face of a damaging strike by 33,000 train drivers.

“These reductions will include executives, managers and employees,” Ortberg said.

Boeing factory workers and supporters picket near the entrance to a Boeing production facility in Renton, Washington

Boeing announced plans to cut 10% of its global workforce as it deals with a machinist strike

The beleaguered company has faced extra federal scrutiny since a panel on its 737 MAX jet exploded during an Alaska Airlines flight in January.

The changes mark a big step for Ortberg, who arrived in August to revamp the beleaguered planemaker that is facing production problems and running out of money.

Thousands of members of the International Association of Machinists and Aerospace Workers (IAM) have been on strike since September 13, seeking 40% pay increases and better pensions.

Negotiations between Boeing and union leaders broke down this week, undermining hopes for a quick end to the lawsuit, which has halted production of its 737 MAX, 767 and 777 jets.

“Our business is in a difficult position and it is difficult to overstate the challenges we face together,” Ortberg said.

“We need to be clear about the work we face and realistic about the time it will take to reach key milestones.”

Acting US Labor Secretary Julie Su flew to Seattle on Monday to intervene in the labor dispute.

“She is there to offer support to both parties throughout the negotiation process,” her spokesperson said.

Reaching an agreement to end the strike is critical for Boeing, which relies on 737 production for much of its cash.

The union representing striking workers said in a statement that the discontinuation of the 767 was worrying and that it would assess its implications.

Even before the strike began, Boeing was burning through cash as it struggled to recover from the explosion of a new plane’s overhead panel.

Reaching an agreement to end the strike is critical for Boeing, which relies on 737 MAX production for much of its cash flow.

The Federal Aviation Administration increased scrutiny of the company after a panel on a MAX plane exploded during an Alaska Airlines flight in January.

The chaos aboard the Alaska Airlines flight exposed weak safety protocols and spurred U.S. regulators to restrict its production.

Meanwhile, Boeing’s year-long delay of the 777X was widely expected in the industry.

The delay pushes deliveries back to 2026.

Boeing in August grounded its test fleet after encountering problems in the jets’ initial test flights.

The plane, designed for airlines looking to connect major cities and carry around 400 passengers, is already years behind schedule.

Boeing unveiled the plane in 2013 and scheduled deliveries for 2020. It has about 480 unfulfilled orders for the plane.

Emirates Airline President Tim Clark, who had an initial order for 150 jets, reacted to the delay.

“We will have a serious conversation with them in the coming months,” he said.

Clark also criticized Boeing’s new schedule for canceling a milestone certification test amid the strike.

“I can’t see how Boeing can make meaningful predictions about delivery dates,” he said.

Ortberg took over at Boeing in August, becoming the troubled company’s third CEO in less than five years. He is a longtime aerospace industry executive but an outsider to Boeing.