Boeing to cut 10% of staff and delay 777X

“Our business is in a difficult position, and it is hard to overstate the challenges we face together,” he wrote.

The news follows another difficult year for Boeing, which included a doorplug blowing out of a 737 MAX 9 in mid-air and the bodged return of its Starliner spacecraft.

More recently, 33,000 machinists began strike action last month in a move that halted production of aircraft and led to the company responding with furloughs.

“Beyond navigating our current environment, restoring our company requires tough decisions and we will have to make structural changes to ensure we can stay competitive and deliver for our customers over the long term,” wrote Ortberg.

“We need to be clear-eyed about the work we face and realistic about the time it will take to achieve key milestones on the path to recovery.

“We also need to focus our resources on performing and innovating in the areas that are core to who we are, rather than spreading ourselves across too many efforts that can often result in underperformance and underinvestment.

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“With that in mind, today I am sharing some difficult decisions and several program updates:

“On the 777X program, the challenges we have faced in development, as well as from the flight test pause and ongoing work stoppage, will delay our program timeline. We have notified customers that we now expect first delivery in 2026.

“We plan to build and deliver the remaining 767 Freighters ordered by our customers and then conclude production of the commercial program in 2027.

“Production for the KC-46A Tanker will continue.

“In Boeing Defence and Space (BDS), our performance on fixed-price development programs is simply not where it needs to be.

“We expect substantial new losses in BDS this quarter, driven by the work stoppage on commercial derivatives, continued program challenges and our decision to complete production on the 767 freighter. I will be providing additional oversight of this business and these programs.

“Along with the above actions, we must also reset our workforce levels to align with our financial reality and to a more focused set of priorities.

“Over the coming months, we are planning to reduce the size of our total workforce by roughly 10 percent. These reductions will include executives, managers and employees. Next week, your leadership team will share more tailored information about what this means for your organisation. Based on this decision, we will not proceed with the next cycle of furloughs.

“As we move through this process, we will maintain our steadfast focus on safety, quality and delivering for our customers.

“We know these decisions will cause difficulty for you, your families and our team, and I sincerely wish we could avoid taking them. However, the state of our business and our future recovery require tough actions.”

Boeing only appointed Ortberg in August to replace Dave Calhoun as chief executive, but he quickly removed BDS chief executive Ted Colbert III in September.

Ortberg has an engineering background and over 35 years of aerospace experience, in a move analysts said was in response to claims Boeing had prioritised money over safety.

His latest changes are set to have huge ramifications for the Australian market, with Virgin having another 18 737 MAX 8s on order, and Qantas 12 787 Dreamliners.

The disruption has already caused Virgin to convert 12 of its 737 MAX 10 orders to MAX 8s, with the next batch of aircraft expected in the second half of 2025.