Boeing Co (NYSE: BA) is issuing layoff notices to 17,000 employees as part of a broader effort to rightsize its workforce.
The cuts, totaling 10% of the company's global headcount, come as the plane maker battles financial turbulence, including a shaky stock performance and production slowdowns.
The layoffs, expected since October, have been confirmed by Reuters, marking yet another step in Boeing's ongoing struggle to stabilize.
A Challenging Year For Boeing
The company will provide U.S. workers with 60 days' notice, in compliance with federal law, keeping them on payroll through January. This move comes as Boeing attempts to regain footing under new CEO Kelly Ortberg, who's juggling:
- A major financial overhaul,
- A union strike, and
- A significant production revival effort.
Boeing 737 MAX: A Bright Spot Amid Challenges
Despite these setbacks, Boeing is now focused on reviving production of its cash cow, the 737 MAX, which has faced major setbacks following the strike by 33,000 workers.
While production is slowly ramping up again, the announcement of layoffs and financial austerity measures is casting a long shadow over employee morale.
Boeing's Bearish Sentiment Persists
But even as Boeing's workforce shrinks, its financial health is under scrutiny. The company raised $24 billion in late October to stabilize its balance sheet, but its stock has been on a steep decline.
Boeing stock is down over 45% year-to-date, with its share price sitting at $138.14-far below key simple moving averages, including the 200-day simple moving average (SMA) of $175.36.
This technical weakness indicates further risk for the stock, with a current moving average convergence/divergence (MACD) of a negative 3.83 and a relative strength index (RSI) of 32.73 signaling that Boeing stock is nearing oversold conditions.
Can Boeing Soar Again?
Despite the recent volatility, Boeing's efforts to reassert itself, particularly with the MAX, are critical to its future growth.
However, with the stock stuck in a bearish trend and its workforce facing uncertainty, investors will be watching closely for any signs of recovery.
The future of Boeing hinges on whether the 737 MAX can continue to take flight-both literally and figuratively.