Boeing to cut approximately 17,000 jobs over the coming months
Dominika Zarzycka/NurPhoto via Getty Images
(NEW YORK) — Boeing will reduce the size of its total workforce by 10% over the coming months, CEO Kelly Ortberg said in a letter to employees on Friday.
That amounts to around 17,000 jobs, based on the company’s December 2023 total workforce numbers.
Ortberg said due to the workforce reductions, Boeing would not proceed with the next cycle of furloughs.
Ortberg also said the 777X program would be delayed until 2026, the 767 freighter program would end in 2027 and the company expects “substantial new losses” in Boeing Defense, Space & Security this quarter.
“Our business is in a difficult position, and it is hard to overstate the challenges we face together,” said Ortberg. “Beyond navigating our current environment, restoring our company requires tough decisions and we will have to make structural changes to ensure we can stay competitive and deliver for our customers over the long term.”
This is a developing story. Please check back for updates.
(NEW YORK) — A surging stock market, low unemployment and robust growth — by just about every measure, the economy stood poised to deliver victory for Vice President Kamala Harris.
The exception, of course, was inflation, and it appears to have overshadowed other indicators. More than two-thirds of voters say the economy is in bad shape, according to the preliminary results of an ABC News exit poll.
Inflation likely shaped negative voter perceptions of the economy and helped fuel anger toward the party in power, just as it has done across the globe since the pandemic unleashed a wave of rapid price increases, experts told ABC News.
The political potency of inflation stems from the visceral, recurring sense of unease caused by high prices, experts added. That feeling leaves voters insecure about their future and desperate for a leader who can change the nation’s course.
“Inflation has a specific and special power in elections,” Chris Jackson, senior vice president of public affairs for Ipsos in the U.S., told ABC News. “It’s something people see in their face every day — every time they go to the grocery store or fill up their car.”
He added, “Inflation is present in people’s lives. It’s something they’re unhappy with and it’s something they rightly or wrongly blame on whoever is in charge.”
The pandemic set off an acute bout of inflation that impacted nearly every country across the world, when global supply chain blockages caused an imbalance between the availability of goods and the demand for them. In other words, too much money chased too few products.
Prices began to rise rapidly in the U.S. in 2021, catapulting the inflation rate to a peak of about 9% the following year. Inflation soared even higher in many other countries, including the likes of Brazil and England, where leaders faced an angry electorate.
In Brazil, where President Jair Bolsonaro cut taxes on fuel and electricity in an effort to slash prices over the months preceding an election that concluded in October 2022, the nation nevertheless replaced him with a leftwing challenger.
Earlier that year, in England, Prime Minister Liz Truss responded to the highest inflation in four decades with an economic policy centered on tax cuts and energy price controls. Her tenure in office lasted just 44 days before market reaction and political disarray led to her stepping down.
The post-pandemic pattern has exemplified a high rate of leadership change amid inflation crises around the world over the last half century, according to a study by Eurasia Group, a political risk consultancy firm. Examining 57 inflation shocks since 1970, the firm found government turnover in 58% of cases.
Further, when there was an election during or within two years of an inflation shock, it led to a change in government in roughly three out of every four instances, according to Eurasia Group.
“We’re seeing this trend on jet fuel after the pandemic,” said Robert Kahn, the managing director of global macro-geoeconomics at the New York-based Eurasia Group. “The pandemic inflation shock contributes to a sense of instability and a loss of confidence among people in their governments.”
Carola Binder, an economics professor at the University of Texas at Austin who studies the history of inflation in the U.S., characterized recent anti-incumbent sentiment in a slightly different way: “When people are experiencing inflation and suffering from it, they want to have someone or something to blame.”
Inflation has cooled dramatically over the past two years, now hovering near the Federal Reserve’s target rate of 2%. Even so, that progress hasn’t reversed a leap in prices that dates back to the pandemic. Since President Joe Biden took office in 2021, consumer prices have skyrocketed more than 20%.
The potential role of inflation in the U.S. election owes to a typical lag between when inflation comes down and when consumers acclimate to new price levels, since a lower inflation rate does not mean prices have come down but rather that they have begun to increase at a slower pace, experts told ABC News.
“When inflation comes back down, the prices of many critical items remain high, especially for people who are stretched and living paycheck to paycheck,” Kahn said.
Consumers will likely acclimate to current price levels over the coming months, but voters will remain sensitive to inflation, experts said.
President-elect Donald Trump’s proposals of heightened tariffs and the mass deportation of undocumented immigrants risk rekindling rapid price increases, some experts said.
When asked about whether inflation could reemerge as an important issue ahead of the next midterm elections in 2026, Jackson said: “If Republicans shoot themselves in the foot, absolutely.”
(NEW YORK) — 7-Eleven will close more than 400 of its “underperforming stores” across the U.S. and Canada in an effort to reduce costs and bolster earnings before the end of the year.
Seven & I Holdings, the Tokyo-based parent company of the convenience store chain, announced the news during an earnings call last week, saying 444 stores will be shuttered due to the cumulative factors of inflation, slower customer traffic, and declining cigarette sales.
“All of these have impacted our sales and merchandise gross profit,” the CEO and President Joe DePinto said on the call.
As a result of the “macroeconomic conditions and evolving industry trends,” DePinto added that the company has revised its earning guidance.
The company reported a 7.3% decline in store traffic back in August and and said during its latest earnings reporting that the pattern corresponds with the “pullback of the middle- and low-income consumer.”
The total number of closures accounts for just over 3% of the more than 13,000 7-Eleven stores in North America.
(WASHINGTON) — The Federal Reserve cut interest rates by a quarter of a percentage point on Wednesday, delivering relief for borrowers at the central bank’s last meeting before President-elect Donald Trump takes office next month.
The central bank predicted fewer rate cuts next year than it had previously indicated, however, suggesting concern that inflation may prove more difficult to bring under control than policymakers thought just a few months ago.
The major stock indexes inched downward in trading after the announcement in response to the forecast of fewer rate cuts.
Speaking at a press conference in Washington D.C. on Wednesday, Fed Chair Jerome Powell said the central bank may proceed at a slower pace with future rate cuts, in part because it has now lowered interest rates a substantial amount.
Powell also said a recent resurgence of inflation influenced the Fed’s expectations, noting that some policymakers considered uncertainty tied to potential policy changes under Trump.
“It’s common-sense thinking that when the path is uncertain, you get a little slower,” Powell said. “It’s not unlike driving on a foggy night or walking around in a dark room full of furniture.”
The move marked the third consecutive interest rate cut since the Fed opted to start dialing back its fight against inflation in the fall. The Fed has lowered interest rates by a percentage point in recent months.
However, the Fed’s forecast on Wednesday said it anticipates only a half a percentage point of rate cuts next year and another half-percent cut in 2026.
The benchmark interest rate helps determine loan payments for everything from credit cards to mortgages. Even after recent cuts, the Fed’s interest rate remains at a historically high level of between 4.25% and 4.5%.
The size of the interest rate cut on Wednesday matched investors’ expectations.
The latest rate cut may prove the Fed’s last for many months, experts previously told ABC News.
A recent bout of stubborn inflation could prompt central bankers to freeze interest rates in place as they bring price increases under control. A humming economy, meanwhile, shows little need for the jolt of activity that lower borrowing costs may provide, the experts said.
Consumer prices climbed 2.7% in November compared to a year ago, marking two consecutive months of accelerating inflation, government data last week showed.
Inflation has slowed dramatically from a peak of more than 9% in June 2022. But the recent uptick has reversed some progress made at the start of this year that had landed price increases right near the Fed’s target of 2%.
In August, Trump said the president should have a role in setting interest rates. The proposal would mark a major shift from the longstanding norm of political independence at the Fed.
Powell struck a defiant tone last month when posed with the question of whether he would resign from his position if asked by Trump.
“No,” Powell told reporters assembled at a press conference in Washington, D.C., blocks away from the White House.
When asked whether Trump could fire or demote him, Powell retorted: “Not permitted under the law.”
