Boeing slashes 10% of workforce as the strike takes a toll on finances 

Boeing has announced that 10% of the workforce, or 17,000 workers, will be made redundant, the 777X jet will be delayed by another year and record losses for the third quarter, all of which come amidst a strike of 33,000 workers. 

The decision to cut the workforce was made by the new CEO Kelly Ortberg last Friday, explaining that the job losses were necessary “to align with our financial reality”. 

Boeing is currently dealing with a strike of 33,000 West Coast workers which has halted the production of 737 Max, 767 and 777 jets. S&P estimates that the strike is costing Boeing $1 billion a month, noting that the company is in danger of losing its prized investment-grade credit rating. 

The company has been struggling to recover from the January mid-air panel blowout on a new plane that has led to US regulators curbing its production.  

Consequently, as Reuters reports, Boeing now expects revenue of $17.8 billion, a loss per share of $9.97 along with a better-than-expected negative operating cash flow of $1.3 billion. Furthermore, Boeing is expected to generate a cash burn of -$3.8 billion according to LSEG data. 

Boeing is examining options to raise billions of dollars through sale of stock and equity-like securities, with sources speaking to Reuters, believing that Boring could raise $10 billion. 

Current estimates suggest that Boeing has $60 million in debt and posted operating cash flow losses of more than $7 billion for the first half of 2024. Therefore, many analysts believe that the company would need to raise between $10 -$15 billion to maintain its current ratings, one notch above junk. 

The announcement of another delay to the 777x, the industry’s biggest twin-engine plane with over 400 seats, now means that the aircraft is six years behind schedule. These delays have been further compounded by media reports of issues around obtaining certification for the plane. 

Emirates is planning on holding what it calls “serious conversations” with Boeing in the next two months following the news that the delivery date for the 777x had been pushed back. 

“Emirates has had to make significant and highly expensive amendments to our fleet programmes as a result of Boeing’s multiple contractual shortfalls and we will be having a serious conversation with them over the next couple of months”, Tim Clark, Emirates President said in a statement. 

Emirates is spending $3 billion to give 191 Boeing 777 and Airbus A380 aircraft “a full facelift” as part of a major retrofitting programme.