Boeing to cut 10% of workers as defense unit loses $2B in 3 months

Boeing’s protection enterprise continued bleeding within the third quarter of 2024 as troubled applications, fixed-price contracts, and an lack of ability to achieve a cope with 1000’s of hanging machinists dragged down the corporate. 

On Friday, the aerospace large introduced that it’ll lower 10% of its whole workforce, roughly 17,000 individuals, in an effort to “place” itself for the long run. The dramatic transfer comes after 30,000 firm employees rejected a brand new labor contract and stopped working final month—a strike endlessly. 

In a letter to workers, CEO Kelly Ortberg famous “substantial new losses” for Boeing’s protection enterprise, pushed by work stoppage on army plane constructed at its factories, together with the commercial-derived Air Power KC-46 tanker and Navy P-8 maritime patrol plane, continued program challenges, and the choice to finish manufacturing of its 767 freighter, the premise of the KC-46, in 2027. 

“Protection, Area & Safety expects to acknowledge pre-tax earnings expenses of $2 billion on the T-7A, KC-46A, business crew, and MQ-25 applications. The T-7A program pre-tax cost of $0.9 billion was pushed by increased estimated prices on manufacturing contracts in 2026 and past. The KC-46A program pre-tax cost of $0.7 billion displays the choice to conclude manufacturing on the 767 freighter and impacts of the IAM [International Association of Machinists and Aerospace Workers] work stoppage. Outcomes additionally embrace unfavorable efficiency on different applications,” based on the corporate’s preliminary third-quarter outcomes.  

The top of Boeing’s protection sector, Ted Colbert, was pushed out of the job only a few weeks in the past, and the corporate has but to announce his successor. 

The corporate will maintain its third-quarter name on October 23.