Boeing is currently facing significant challenges from its employees, customers, and investors after announcing a 10% workforce reduction and $5 billion in related costs. The situation is compounded by a strike by mechanics that has now entered its fifth week.
Industry insiders indicate that Boeing plans to hold a series of internal meetings this week to discuss potential job cuts, which may include involuntary layoffs. This approach could be more manageable in terms of costs and retaining specialized skills.
On November 11, Boeing surprised many by announcing the layoff of 17,000 employees while also disclosing preliminary results for the previous quarter. The announcement highlighted delays in the 777X program and the closure of production for the 767, which collectively resulted in the recognition of $5 billion in expenses. However, Boeing did not provide a timeline for the layoffs.
The delivery of the 777X has been postponed by a year to 2026, a widely anticipated outcome following previous delays in certification and testing. This also means that the successor to the 777 small passenger aircraft will be delayed by another six years.
Tim Clark, the president of Emirates Airlines, which ordered 150 units of the 777X over a decade ago to support Boeing’s launch of the world’s largest twin-engine jet, expressed strong criticism of the company on November 14.
In an unusual written statement, he remarked, “Due to repeated gaps in Boeing’s contract performance, Emirates has had to make significant and costly revisions to our fleet plans. We will have serious conversations with them in the coming months.”
He also questioned Boeing’s revised timeline, citing the halt in certification testing milestones and the ongoing strike. “I do not understand how Boeing can make any meaningful predictions about the delivery date,” he stated.
Emirates Airlines is the largest operator of the 777 jet series, a popular long-range aircraft that is now overshadowed by delays in its successor and a crisis involving the 737 due to safety and quality issues.
The airline market is experiencing growth, and many competitors are vying for a limited workforce to meet demand and alleviate pressure on the aerospace supply chain.
Nick Cunningham, an analyst at Agency Partners, emphasized the importance of retaining the key 10% of employees. “In a post-pandemic environment where skill shortages are more pronounced, this is crucial,” he noted.
Analysts suggest that Boeing’s preliminary results from the last quarter, which recorded just over $10 billion in total cash, could provide temporary relief from some immediate pressures. However, they also cautioned that Boeing still needs to raise funds before the end of the year.
