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Boeing (BA -2%) is trading lower after announcing late Friday that it would reduce its workforce by 10%, or 17,000 jobs. The aerospace giant also delayed its timeline for the first 777X deliveries. It also guided to Q3 revenue of approximately $17.8 bln, which is below analyst expectations. Recall that the Boeing just named Robert "Kelly" Ortberg as its new CEO. He took the helm on August 8 and is getting right into it.

• On the 777X program delay, Boeing cited challenges it has faced in development as well as from the flight test pause and ongoing work stoppage. The company now expects first delivery of the 777-9 in 2026 and the 777-8 freighter in 2028, resulting in a $2.6 bln pre-tax earnings charge. This new schedule reflects BA's updated assessment of its certification timelines to address delays in flight testing as well as anticipated delays associated with the IAM (machinist union) work stoppage.
• In addition, its Commercial Airplanes segment also plans to conclude production of the 767 freighter and recognize a $400 mln pre-tax charge, which also reflects impacts from the IAM work stoppage. BA plans to build and deliver the remaining 767 Freighters ordered by customers and then conclude production of the commercial program in 2027. Production for the KC-46A Tanker will continue.
• The problems are not only on the commercial side, Boeing also concedes that its Defense segment needs to improve. Specifically, its performance on fixed-price development programs is simply not where it needs to be. Boeing expects substantial new losses in its Defense segment in Q3, driven by the work stoppage on commercial derivatives, continued program challenges and its decision to complete production on the 767 freighter.
• Boeing's CEO conceded that its business is in a difficult position and that it's hard to overstate the challenges it faces. He said that these are tough decisions and BA will have to make structural changes to stay competitive. Also, Boeing needs to focus on core areas, rather than spreading itself across too many efforts that can often result in underperformance and underinvestment.

It has been a rough few years for Boeing given all its well-documented safety issues and production delays. The silver lining is that a lot of investors wanted the new CEO to shake things up and these are some pretty significant moved being made. When Boeing hired Ortberg, a key selling point was that he was deeply respected in the aerospace industry, with a reputation for running complex engineering and manufacturing companies. For now, we give him the benefit of the doubt. Hopefully, he will be the one to turn finally things around. Also, we suspect these job cuts might push its union to end the work stoppage and agree to a deal.