According to Interface News, facing ongoing strikes and cash flow shortages, Boeing announced plans to lay off approximately 10% of its workforce, involving around 17000 employees, on October 11th local time. The CEO of the company, Ultraberg, stated in a memo to employees that the layoffs will include executives, managers, and regular employees, and will take place in the "coming months". As of the end of 2023, Boeing has a total of 171000 employees. Our business situation is difficult, and the challenges we face together cannot be emphasized too much, "Ultraberg said in the memo. He also announced that the delivery of the new Boeing 777X aircraft will be further delayed until 2026, and Boeing will cease production of the 767 freighter primarily used for transporting cargo before 2027.
On the same day, Boeing released its preliminary results for the third quarter, expecting a revenue of $17.8 billion and a loss of $9.97 per share. Operating cash outflow was $1.3 billion, and as of the end of the quarter, cash and securities investments amounted to $10.5 billion. Boeing will release complete data on October 23rd.
Overnight, Boeing rose over 3% in the US stock market, with its latest market value exceeding 92.8 billion US dollars.
According to the International Finance News, Boeing's strike began on September 13th and involves approximately 33000 mechanics assembling Boeing's best-selling aircraft. Jefferies analyst Sheila Kahyaoglu stated last month that this labor conflict has led to production shutdowns of Boeing's "cash cow" 737 Max and other jet airliners, and could result in Boeing consuming an additional $1.3 billion in cash every month.
Boeing just had a falling out with the International Association of Machinists and Aerospace Workers (IAM), the largest union of companies organizing strikes, this week. On October 8th local time, Boeing announced that it had withdrawn its salary proposal to IAM after two days of negotiations with federal government mediators, as the union refused to seriously consider the labor agreement terms proposed by Boeing.
In addition, the Federal Aviation Administration (FAA) of the United States stated on the same day that it had issued a safety alert to airlines, warning that the rudder movement of some Boeing 737 models may be restricted or stuck.