Boeing (BA, Financial) just dropped a bombshell: more than 400 layoff notices went out this week as part of a massive plan to cut 17,000 jobs—or 10% of its global workforce. It's been a brutal year for the aerospace giant, hit by regulatory setbacks, slowing production, and an eight-week machinists' strike that cost the company over $6 billion in Q3 alone. CEO Kelly Ortberg says the layoffs are about trimming overstaffing, not fallout from the strike, but morale among employees is tanking as Boeing navigates what he calls its “financial reality.” The company's signature 737 MAX, once a revenue juggernaut, is still struggling to meet production targets, adding to the pain.
Here's the twist: Boeing's demand is solid—more than solid, actually. The company is sitting on a backlog of over 6,000 planes worth half a trillion dollars. Recent defense wins, including a $5.2 billion deal with Israel and $8.46 billion in U.S. contracts, prove Boeing's long-term relevance in aerospace. But short-term pressures are brutal. Shares are down a staggering 42% this year, battered by layoffs, diluted equity, and rising debt. Analysts see a potential rebound fueled by January's typical tax-loss recovery, but for now, the stock is deep in the red. For those with the stomach for turbulence, Boeing could be a long-term play, but it's not for the faint of heart.
What really has investors sweating? A wildcard: Trump-era trade tensions could come roaring back, with the ex-president eyeing steep tariffs on imports. Boeing's supply chain relies on international parts, which could mean skyrocketing costs and slimmer margins. Add in potential retaliation from global markets, and Boeing's shot at a post-strike revival gets even trickier. For now, Boeing remains a heavyweight in aviation, but its path to recovery is lined with challenges that could leave even seasoned investors second-guessing their next move.
