Boeing cuts 17,000 jobs globally amidst mounting chaos

Boeing is gearing up to send layoff notices to thousands of its employees as it grapples with a tough labour strike and mounting financial troubles. 

A report shared by Anderson Economic Group states that the US-based aerospace giant has already lost $5 billion due to the strike led by the West Coast factory workers' union, wherein 33,000 workers walked off the job since September 13. Now, in an effort to stabilise operations, Boeing plans to layoff 17,000 workers globally, as CEO Kelly Ortberg emphasised the need to "reset workforce levels to align with our financial reality,"

According to media reports, the International Association of Machinists and Aerospace Workers (IAM) is pushing for a 40 per cent wage increase over four years, and despite ongoing negotiations, tensions remain high. Acting Labor Secretary Julie Su even flew to Seattle to help mediate the situation, her first in-person attempt to bring both sides closer.

Boeing is preparing to issue 60-day layoff notices, mainly to employees in its commercial aviation division, with job cuts expected by mid-January 2025. If things don’t improve, a second wave of layoffs could follow in December. Unions representing engineers and other professionals have already been notified, though striking IAM workers remain unaffected for now. To add to Boeing’s troubles, its stock dropped 1.3 per cent following the layoffs news, and 777X jetliner’s production was also delayed until 2026. Key customers including Emirates Airline, have warned Boeing of commercial fallout, questioning its financial stability.

Furthermore, Boeing’s legal challenges add onto its ongoing struggles. According to media reports, a settlement is in process between Boeing and the US Department of Justice over the 737 MAX aircraft, which was grounded after two fatal crashes. However, families of the crash victims are pushing for criminal prosecution of Boeing and its executives, adding another layer of complexity to the company's woes.

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Industry analysts warn that Boeing may need to raise up to $15 billion by year-end to keep operations afloat, despite having over $10 billion in cash reserves. CEO Kelly commented, “While our business is facing near-term challenges, we are making important strategic decisions for our future.”