Boeing to cut 17,000 jobs, delay first 777X deliveries as strike hits finances

Boeing will cut 17,000 jobs, or 10% of its global workforce and delay first deliveries of 777X jets by a year and record $5 billion in losses in the third quarter, as the US plane maker continues to spiral during a month-long strike.

CEO Kelly Ortberg said in a message to employees that the significant downsizing is necessary "to align with our financial reality" after an ongoing strike by 33,000 US West Coast workers halted production of its 737 MAX, 767 and 777 jets.

Boeing shares fell 1.1% in after-market trading.

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The sweeping changes are a big move by Ortberg, who arrived in August at the helm of the beleaguered company's promising to reset relations with the union and its employees.

Boeing, which reports third-quarter earnings on October 23, said in a separate release it now expects revenue of $17.8 billion, a loss per share of $9.97, and a better-than-expected negative operating cash flow of $1.3 billion.

Thomas Hayes, equity manager at Great Hill Capital, said the layoffs could put pressure on employees to end the strike.

"Striking workers who temporarily do not have a paycheck do not want to become unemployed workers who permanently do not have a paycheck," Hayes said in an email. "I would estimate the strike will be resolved within a week as these workers do not want to find themselves in the next batch of 17,000 cuts", he added.

Ratings agency S&P estimated the strike is costing Boeing $1 billion a month and the company risks losing its prized investment-grade credit rating.

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