Boeing faces massive layoffs amid financial turbulence
The American aircraft manufacturer Boeing has initiated a process for group redundancies. Notices are already being issued to employees. These measures will affect 17,000 individuals, representing 10 per cent of the company’s global workforce. The corporation explains the job cuts by citing a challenging financial situation.
Boeing announced that it would lay off approximately 10 per cent of its global staff, equating to 17,000 people. Those receiving their notices now will remain on the payroll until January. This is in accordance with federal regulations in the USA, which require employers to provide a 60-day notice period.
Due to financial difficulties, the company is also postponing the launch of its 777X aircraft. It has announced that its sales figures for the third quarter are likely to fall significantly below Wall Street analysts’ expectations. The redundancies are projected to save Boeing around $1.7 (£1.3) billion.
At the start of November, a 52-day mechanics' strike concluded, which had cost the company $100 (£78) million in lost revenue each day. Approximately 33,000 employees from two major factories in the US state of Washington took part in the protest. These sites produce some of the world's best-selling aircraft, such as the Boeing 737, as well as the 777, 767, and several military programmes. The company has agreed to the employees' demand for a 35 per cent wage increase spread over four years, costing Boeing over a billion dollars.
Boeing decided to sell shares to stabilise the situation. By the end of October, the company offered 90 million common shares and securities held by depositors worth $5 (£4) billion, raising approximately $24 (£19) billion in total.
Settlement and fine. Boeing admitted guilt
A decision to admit guilt regarding two Boeing 737 MAX crashes (in Indonesia and Ethiopia), where 346 passengers lost their lives, was significant for the company’s financial standing. In relation to the fraud charges, the giant agreed to pay a fine of $243.6 (£192) million to resolve the investigation by the U.S. Department of Justice.
Under the arrangement, the aircraft manufacturer agreed to spend at least $455 (£355) million over the subsequent three years to enhance safety and compliance programmes.
By the end of October, Boeing reported its financial results for the third quarter, documenting the largest loss in nearly four years, amounting to $6.17 (£4.9) billion.
