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Boeing Announces Shock Layoff of 10% of Employees: 17 Jobs Lost

Drastic reorganization for the aeronautics giant in financial crisis. "Difficult but necessary decisions" explains the CEO who in the meantime must deal with the strike of 33 thousand workers. New delays for the 777X model

Boeing Announces Shock Layoff of 10% of Employees: 17 Jobs Lost

Boeing, the American aviation giant, has announced the llayoff 10% of its workforce, about a quarter 17.000 employees, in response to serious financial difficulties. The CEO Kelly Ortberg he explained that this reorganization, necessary to align the company with its economic situation, will involve staff at all levels, from executives to workers. “We need to reorganize our workforce to align with our financial reality,” Ortberg said.

The decision comes after years of problems, including production delays, technical incidents and a strikeor involving 33.000 workers of the International Association of Machinists and Aerospace Workers (IAM) union, which began almost a month ago, which is aggravating further the corporate crisis.

Ortberg: “Difficult but necessary decisions”

Kelly Ortberg, named Boeing CEO in August of this year, took over the company at one of the most critical moments in its history. In less than three months, Ortberg found himself having to manage a drastic downsizing plan and make unpopular decisions, such as laying off thousands of employees. “Our company is in a difficult position,” Ortberg said. “It’s hard to overstate the challenges we face together.”

The corporate reorganization will not only stop at layoffs, but will also include targeted structural changes to improve efficiency and long-term competitiveness. Among other measures announced, there is the reduction of operating costs and a updating of production processes, in an effort to get Boeing back on a sustainable growth trajectory.

The consequences of the strike

Lo strike of the International Association of Machinists and Aerospace Workers (IAM) had a devastating impact on the company, slowing down the production of models key aircraft such as the 737 Max, 767 and 777. The union rejected a contract proposal put forward by Boeing, demanding better pay, more job security and the restoration of pension benefits that were cut in recent years. This clash between management and workers has contributed to Boeing's losses, with further financial blows expected in the next quarter.

“We are coping a very difficult reality,” Ortberg said in the message. “In addition to the difficulties imposed by the strike, we face structural challenges that require painful decisions.” The company’s losses accumulated since 2018, exacerbated by the downturn in the aviation industry during the pandemic, have forced Boeing to take drastic measures to ensure its survival.

The 17.000 employees who will be affected by the layoffs represent a large portion of Boeing's global workforce, and many of them work in main production plants of the company, including the one in Seattle. The unions have already expressed strong concerns about the future of the workers, asking the government and the company to intervene to guarantee a plan to reabsorb the laid-off employees.

Meanwhile, the Iam ccontinue to negotiate with the company to find an agreement that can avoid further layoffs and improve working conditions for the employees who will remain.

New delays on the 777X model

In parallel with the layoffs, Boeing also announced a New 777X delivery delay, a new generation aircraft that was supposed to represent a turning point for the company. The first delivery, initially scheduled for 2025, was postponed to 2026 due to further complications in development and certification. The 777X, introduced in 2013 as the successor to the 777 model, has already immediately postponed several times, and this further delay casts a shadow over the future of one of Boeing's most ambitious projects.

The difficulties in completing the project are linked not only to technical problems, but also al drop in demand in the global market aviation. The pandemic has drastically reduced the number of new aircraft orders from airlines, which are still trying to recover from the crisis. In addition, technical incidents involving Boeing in recent years, such as the detachment of a piece of fuselage during a flight, have further undermined confidence in the brand.

Despite the critical situation, Ortberg tried to maintain an optimistic tone, promising that Boeing will everything possible to recover. “I am convinced that, with the right strategic choices and the support of our employees, we can overcome this crisis and return to being a leader in the aviation sector,” concluded the CEO.

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