Boeing will lay off 17,000 workers and delay the introduction of the 777X due to a machinist strike

In a surprise financial update on Friday, the company also said it expected to report a third-quarter loss of $9.97 per share, with pretax expenses for its commercial aircraft division at $3 billion and for its defense business at $2 billion would be US dollars.

“Our company is in a difficult situation and the challenges we face together can hardly be overstated,” he wrote. “Beyond managing our current environment, recovering our business requires difficult decisions and we must make structural changes to ensure we remain competitive and able to deliver to our customers over the long term.”

Citing “challenges we faced in development” and the ongoing work stoppage, Ortberg said Boeing has informed its customers that delivery of the 777X aircraft has been pushed back to 2026. Boeing halted flight tests of the yet-to-be-certified jet in August after it found structural damage to one of the test models.

The manufacturer touts the 777X as the “world’s largest and most efficient” twin-engine passenger aircraft that will use 10% less fuel and emissions with 10% lower operating costs than competitors, but customers have been waiting since 2020 for the promised debut.

Ortberg also announced that Boeing will end production of its 767 freighters in 2027 after construction of the aircraft currently on order is completed, while production of the KC-46A tanker will continue.

Boeing Defense, Space & Security, meanwhile, will face “significant new losses” this quarter “due to the commercial derivatives work stoppage, ongoing program challenges and our decision to complete production of the 767 cargo aircraft,” the CEO said.

“We know these decisions will cause hardship for you, your families and our team, and I sincerely wish we could avoid them,” Ortberg wrote. “However, the state of our business and our future recovery require aggressive action.”

Negotiations between the striking machinists and the company have increasingly deteriorated in recent days. Talks collapsed this week as both sides pointed fingers at the other over the current standoff.

Boeing said it had withdrawn its last offer and further talks appeared pointless, while the International Association of Machinists and Aerospace Workers blamed the plane maker for failing to move on a range of issues including wages, retirement plans, vacation and sick leave.

Boeing filed an unfair labor practice lawsuit against the union on Thursday, accusing it of negotiating in bad faith.