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Boeing is set to reduce its workforce by 10%, affecting around 17,000 employees, amidst mounting losses and a prolonged machinist strike. The company is also facing delays in launching its new wide-body airplane, with the still-uncertified 777X now expected to be delivered in 2026, six years behind schedule. Additionally, Boeing will cease production of commercial 767 freighters in 2027 after fulfilling current orders, as announced by CEO Kelly Ortberg in a recent staff memo.
The company is anticipating a third-quarter loss of $9.97 per share, with expected pretax charges of $3 billion in the commercial airplane unit and $2 billion in the defense business. Boeing also foresees an operating cash outflow of $1.3 billion for the quarter. These measures come as Ortberg works to address ongoing challenges and steer Boeing towards long-term competitiveness and customer satisfaction.
The machinist strike, which began in September, has exacerbated Boeing’s financial strain, with ratings agencies cautioning against a potential credit rating downgrade. The company’s cash reserves have been depleting, further compounded by the impact of the strike on operations and finances. Efforts to reach a resolution with the International Association of Machinists and Aerospace Workers have faltered, leading to increased tensions and disruptions in production.
Moving forward, Boeing plans to implement job and cost reductions gradually in the coming months as part of a broader restructuring effort. This comes at a critical juncture for the aerospace giant, as it navigates market uncertainties and works to restore stability following a series of setbacks. Despite the challenges ahead, Boeing remains committed to repositioning itself for sustained success in the competitive aviation industry.
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Emily Jensen, graduated from the London School of Economics and Political Science (LSE) in the UK in 2015 with a degree in Economics. She specializes in financial markets and international trade. After graduating, she worked as an analyst at an investment bank in London, where she developed expertise in global economic trends. She later transitioned into consulting, focusing on fintech ventures and providing insights into global economic developments. Emily is passionate about the intersection of finance and technology and aims to drive innovation in the financial sector.