Boeing Co. plans to cut its Commercial Airplanes workforce by about 5% due to ongoing production delays. Stephanie Pope, head of Boeing Commercial Airplanes, informed employees of this decision in an internal memo on Monday. She said, "Adjusting our production schedules and reducing aircraft output puts us in an overstaffed position." The layoffs will happen through a mix of attrition and involuntary reductions. Notifications are expected to start in December, as Boeing must give 60 days' notice in many U.S. states.
Key Details
This announcement comes after Boeing acknowledged it will miss its production and delivery targets for the 737 jetliner in 2026. The company now expects to reach a production rate of 47 jets per month by early 2027. This is a delay from its previous goal of summer 2026. Analysts had expected this target to be met by 2028. Boeing's CEO, Kelly Ortberg, noted that the company would not achieve $10 billion in free cash flow until 2029, which is later than previously expected.
Background
Boeing's production issues go beyond the 737. The company has struggled to increase output of its 787 widebody jet and has faced disruptions in its 767 and 777 programs. These job cuts mark the first major workforce reduction since Ortberg's initial layoffs of 17,000 jobs after he joined the company in late 2024. Boeing's stock has declined 21% this year, with shares down 0.7% after the latest news.
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The layoffs and production delays may affect Boeing's stock performance and investor sentiment, especially in the aerospace sector. Investors will likely watch Boeing's ability to stabilize production rates and meet future delivery targets. Look for updates on production timelines and financial forecasts in Boeing's upcoming earnings report.
Based on reporting by: livemint.com