Boeing is set to lay off 17,000 employees, postpone the first deliveries of its 777X jet by a year, and report $5 billion in losses for the third quarter, as the U.S. aircraft manufacturer grapples with the ongoing impact of a month-long strike.

In a message to employees, Boeing CEO Kelly Ortberg emphasized the need to reduce the workforce to "align with our financial reality" amid a strike by 33,000 workers on the U.S. West Coast that has halted production of key aircraft, including the 737 MAX, 767, and 777 models.

"We are resetting our workforce levels to align with our financial reality and focus on our priorities. Over the coming months, we plan to reduce our total workforce by roughly 10 percent, affecting executives, managers, and employees," Ortberg stated.

As a result of these developments, Boeing shares dropped 1.7% in after-hours trading.

The company has incurred $5 billion in charges across its defense and commercial sectors. Securing a deal to end the strike is crucial for Boeing, which recently filed an unfair labor practice charge against the machinists union, alleging that it has not engaged in good faith negotiations. According to S&P, the strike is costing the company around $1 billion each month, putting its prized investment-grade credit rating at risk.

In his message, Ortberg announced that Boeing now anticipates the first delivery of its 777X jet to be pushed back to 2026, citing ongoing development challenges, a flight-test pause, and the strike. The company had previously encountered certification issues with the 777X, which had already delayed the aircraft’s launch.

Boeing is scheduled to report its third-quarter earnings on October 23 and has projected revenue of $17.8 billion, a loss per share of $9.97, and negative operating cash flow of $1.3 billion.

"While our business is facing near-term challenges, we are making critical strategic decisions for our future and have a clear plan for restoring our company," Ortberg said.

The company will also terminate its 767 freighter program in 2027, after completing and delivering the remaining 29 ordered planes, although production of the KC-46A Tanker will continue. Additionally, in light of the job cuts, Boeing will end a furlough program for salaried employees that was introduced in September.

Before the strike commenced on September 13, Boeing was already struggling with cash flow issues, exacerbated by a January incident involving a mid-air panel blowout that raised safety concerns and led to production curbs by U.S. regulators.

According to recent reports, Boeing is exploring options to raise billions through stock and equity-like securities, potentially seeking to generate around $10 billion. The company currently holds approximately $60 billion in debt and reported over $7 billion in operating cash flow losses in the first half of 2024. Analysts suggest that Boeing may need to raise between $10 billion and $15 billion to maintain its current credit ratings, which sit just above junk status.