Beijing, October 12 (Xinhua) -- Boeing announced on the 11th that it plans to lay off about 10% of its workforce worldwide, involving approximately 17000 positions.
Boeing CEO Kelly Altberg told employees in a memo on the same day that the approximately 17000 positions involved in the layoffs will include executives, managers, and regular employees.
According to the company's forecast, Boeing's third quarter revenue will be much lower than Wall Street's expectations. Our business is in a difficult situation and we must undergo structural changes to maintain competitiveness, "Otterberg said in the memo
About 33000 employees at Boeing's West Coast factory went on strike on September 13th, and the labor and management sides have yet to reach an agreement on compensation issues. The nearly one month long strike has led to production interruptions at Boeing, consuming a significant amount of capital reserves.
According to the plan, the company will once again postpone the delivery of the 777X aircraft until 2026.
At a time when Boeing is facing operational difficulties, international credit rating agencies are considering adjusting their ratings of the company. Standard&Poor's stated that due to the ongoing strike affecting Boeing production, the agency is considering downgrading Boeing's rating to junk level. Last month, Moody's stated that it was considering taking similar measures. Fitch has emphasized the increased operational risks for Boeing, but has not yet announced the assessment results.
Bloomberg quoted analysts from JPMorgan Chase as saying that if two of the three major international credit rating agencies downgrade Boeing's rating to junk, most of its $52 billion in outstanding long-term debt will no longer meet the investment grade index rating. This will make Boeing the largest corporate borrower in US history to have its investment grade rating stripped and added to the junk bond index, commonly referred to as the 'fallen angel' in the industry.