Boeing Shares Tumble Amid Workforce Cuts and Production Challenges
1min read Boeing shares have experienced a notable downturn, decreasing by 3.58% on November 13, marking a three-day decline totaling 7.72%. This slump follows the company's announcement that it has started issuing layoff notices as part of a major restructuring effort designed to reduce its global workforce by approximately 10%, equating to 17,000 jobs. These measures are part of Boeing's strategy to manage costs amid its existing high debt levels.
While grappling with workforce reductions, Boeing remains optimistic about its future in the aviation cargo sector. The company projects a 4% average annual increase in air cargo traffic through 2043, anticipating a significant expansion in the global air cargo fleet prompted by robust demand in Asia. Boeing expects to see the fleet grow from 2,340 freighters in 2023 to 3,900 by 2043.
Moreover, in its satellite segment, Boeing has successfully delivered the seventh and eighth O3b mPOWER satellites to SES. These state-of-the-art satellites are equipped with Boeing's sophisticated software-defined communications technology and are now en route to Cape Canaveral for an anticipated December launch.
This delivery underscores Boeing's commitment to advancing satellite capabilities. The O3b mPOWER satellites are equipped to offer versatile, high-efficiency connectivity due to over 5,000 steerable beams, which can provide tailored bandwidth and power to designated regions or customers. This innovation supports reliable internet access, catering to diverse needs from video streaming to essential remote operations.
Alongside its technological advancements, Boeing faces hurdles following a recent labor strike. The strike, involving over 32,000 of Boeing's machinists, was resolved last week when workers accepted a new contract. Nevertheless, the company indicated that it would take several weeks for production, particularly of the 737 Max, 767, and 777 models, to normalize.
Production challenges are compounded by the strike's impact, which resulted in Boeing delivering only 14 jets in October, its weakest performance since the height of the pandemic in 2020. Despite disruptions, Boeing reported continuing sales activity, including orders for 63 aircraft in October, slightly fewer than the previous month.
As Boeing navigates through these operational obstacles, it concurrently restructures its workforce and advances in satellite technology, aiming to solidify its standing amidst intense global competition.