Boeing to cut 17,000 jobs, delay first 777X delivery while warning of deeper Q3 losses

Boeing (NYSE:BA) -2% post-market Friday after unveiling plans to cut its total workforce by ~10% and delay the first delivery of its 777X jet by a year, while reporting preliminary Q3 revenues that missed analyst consensus and saying it will recognize $5B in earnings charges.

“Our business is in a difficult position, and it is hard to overstate the challenges we face together,” new CEO Kelly Ortberg said in a memo to employees announcing the job cuts; Boeing (BA) employed 171K at the end of 2023.

The company needs to focus its resources “in the areas that are core to who we are, rather than spreading ourselves across too many efforts that can often result in underperformance and underinvestment,” the CEO said.

Ortberg said the company will delay the launch of its 777X to 2026 instead of 2025; the plane, designed for airlines wanting to connect world’s major cities and to carry ~400 passengers, is years behind, and in August, Boeing (BA) grounded the plane’s test fleet after finding problems during initial test flights.

The company also will discontinue its 767 cargo plane; it has has delivered eight of the planes YTD to FedEx and UPS, and will fill the remaining 29 orders for the 767 before phasing it out in 2027.

Boeing (BA), which reports Q3 earnings on October 23, said in a separate release it now expects quarterly revenues of $17.8B, below $18.5B analyst consensus estimate, a GAAP loss of $9.97/share, and negative operating cash flow of $1.3B.

The company said it expects to recognize $5B of earnings charges, with the commercial aircraft subsidiary seeing $3B of charges related to the 777X and 767 programs, and $2B of charges related to the T-7A, KC-46A, Commercial Crew, and MQ-25 programs.

Boeing (BA) made its announcement amid a crippling strike by 33K U.S. West Coast workers that has shuttered production of its 737 MAX, 767 and 777 jets and drained the company’s reserves.