Boeing to cut approximately 17,000 jobs over the coming months
(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.
(WASHINGTON) — Borrowers eager for the Federal Reserve to abandon high interest rates could not have scripted a better four-word declaration than the one on Friday from Fed Chair Jerome Powell: “The time has come.”
Powell indicated that the Fed would soon bring interest rates down from a 23-year high. The shift could lower borrowing costs for everything from credit cards to auto loans to mortgages.
The pace and scale of rate cuts remains unknown, however. A cautious approach could leave borrowers saddled with high costs for the next several years while an aggressive reset could ease loan rates substantially within months.
“The question now is how far and how fast should the Fed cut rates?” Mark Zandi, chief economist at Moody’s Analytics, said in a post on X on Sunday.
The chances of an interest rate cut at the Fed’s next meeting in September are all but certain, according to the CME FedWatch Tool, a measure of market sentiment.
Market observers are divided over whether the Fed will impose its typical cut of a quarter of a percentage point or opt for a larger half-point cut. The tool indicates a roughly 60% chance of a quarter-point cut and a 40% chance of a half-point cut.
Over the remainder of the year, the most likely scenario is a quarter-point rate cut at each of the Fed’s three scheduled meetings in September, November and December, the CME FedWatch Tool shows.
The Fed is guided by a dual mandate to keep inflation under control and maximize employment. In theory, low interest rates help stimulate economic activity and boost employment; high interest rates slow economic performance and ease inflation.
In recent months, the labor market has slowed alongside cooling inflation. That trend was highlighted last month by a weaker-than-expected jobs report that raised concern among some economists that the U.S. may be headed toward a recession.
Recent trends have shifted the Fed’s focus away from controlling inflation and toward ensuring a healthy labor market, Powell said Friday.
“A cooldown in the labor market is unmistakable,” Powell said, adding that he would let economic performance dictate the course of rate cuts.
“The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook and the balance of risks,” Powell said.
Gregory Daco, chief economist at accounting firm EY, said in a statement to ABC News that he expects a quarter-point rate cut at each of the Fed’s next three meetings in an effort to soften the ongoing economic slowdown. However, worries about an imminent recession are overstated, Daco added.
The Fed aims to “buffer the economic downshift,” Daco said.
Deutsche Bank, which also projects three quarter-point rate cuts before the end of the year, said in a note to clients on Friday that a weak jobs report early in September could push the Fed to opt for a larger half-point cut at its meeting later that month.
“The softer-than-expected July jobs report and recent bouts of market volatility have shifted risks towards the Fed cutting more aggressively upfront,” Deutsche Bank said.
Analysts differ widely over the course of interest rate cuts in the next year or two. Zandi said the Fed should bring interest rates down significantly from the current target rate of between 5.25% and 5.5%. By the end of next year, interest rates should stand at 3%, he added.
By contrast, former Treasury Secretary Larry Summers cautioned against an aggressive approach to interest rate cuts. “We need to be rather more cautious about the medium term outlook for monetary policy,” Summers said in a post on X on Saturday.
Still, Summers added, the need for some rate cutting is beyond question.
“Inflation is coming down. The economy is slowing. On current facts, absolutely the next move should be towards monetary policy easing,” Summers said.
(NEW YORK) — Chuck E. Cheese has just the ticket for parents looking to save some cheddar on family fun outings, thanks to its new membership plans.
The Texas-based pizzeria and family entertainment chain that brings arcades and animatronic shows under one roof, announced its first-ever nationwide, unlimited-visit monthly membership program to help unlock new discounts for one low monthly fee.
After a successful test run of its Summer Fun Pass boasting strong consumer demand, Chuck E. Cheese laid out details for the new program that will allow families to “visit Chuck E. Cheese as often as they want, play up to 250 games per day, and enjoy discounts of up to 50% off on most food and drinks,” the company said in a press release.
“We wanted to create a program that makes Chuck E. Cheese more affordable for families,” Mark Kupferman, the chain’s executive vice president, said in a statement. “Amid rising costs, our goal was to offer great value, and develop an easy, and fun solution for everyone. After nearly a year of successful testing in several markets, and great demand, we’ve seen firsthand how much families love it. We’re thrilled to launch this program nationwide.”
Personal finance expert and senior editor for Business Insider Katherine Fan told ABC News’ Good Morning America that “families can get a lot of value out of the Chuck E. Cheese Fund Pass, because it allows them to bring up to six family members on a single power pass.”
She added, “let’s say you go in on a Tuesday and you have the highest tier pass, which gets you 250 points. You can go right back again the next day and play 250 games again.”
What’s included in Chuck E. Cheese new membership plan?
There are three tiers with varying levels of gameplay and pricing, two of which are monthly memberships with unlimited visits. A single Fun Pass can be shared by a family with multiple children.
The Monthly Fun Pass Membership offers unlimited daily visits for one low, recurring monthly fee, whereas the Two-Month Fun Pass provides unlimited visits for two months for a one-time charge. Both packages offer the same benefits, with the main difference being the billing method.
The three tiers of Fun Pass are: Bronze Fun Passes for $7.99 per month with 40 games per visit and 20% off most food and drinks; Silver Fun Pass for $11.99 per month with 100 games per visit and 30% off most food and drinks, plus extra play points; and the Gold Fun Pass for $29.99 a month with 250 games per visit, plus 50% off most food, drinks and extra play points.
“For families looking for unlimited visits over a short period, like a holiday break or summer, the Two-Month Pass is a perfect fit,” Kupferman explained. “For those who love the idea of visiting year-round, the Monthly Membership is an outstanding choice. Both options provide incredible value and endless fun.”
Passes may be used at over 470 participating Chuck E. Cheese locations throughout the U.S.
New pricing plans from Chuck E. Cheese signals reboot
Like most indoor event spaces and restaurants, Chuck E. Cheese struggled amid the COVID-19 pandemic, and declared bankruptcy in 2021. But now the family entertainment chain is looking for a reboot to draw families back to their arcade style restaurant.
“The hardest part of any business is getting people in through the door or to your website. And with this fun pass — members are more incentivized to go through Chuck E. Cheese on a more regular basis,” Fan explained. “You’ll then be tempted to buy some drinks or get some food. Or maybe you’ll want to pay a little bit extra to play the crane games or have your kids play on the trampoline.”
This comes on the heels of other entertainment companies, including movie theaters, that have opted to test subscription pricing.
AMC Theaters reported the average ticket price in 2023 was $11.23, which for a family of four makes an outing to the movies $45, without any concessions.
But for regulars moviegoers, memberships can offer an opportunity to save. MoviePass, for example, starts at $10 a month for three free movies.
AMC Stubs A-List offers 3 free movies a week for a $25 monthly fee, with price contingent on location.
(NEW YORK) — The Senate Permanent Subcommittee on Investigations published a memo Wednesday including new details about Boeing safety failings relating to the Alaska Airlines door plug incident in January.
The memo — released ahead of Federal Aviation Administration Administrator Michael Whitaker’s planned testimony before the subcommittee on Wednesday — suggested Boeing had failed to ensure adequate standards in multiple areas.
Boeing personnel, the memo said, “continue to feel pressure to prioritize speed of production over quality.”
The Jan. 5 Alaska Airlines incident saw a door plug on flight 1282 blow out minutes after takeoff from Portland, Oregon, leaving a large hole in the side of the Boeing 737 Max 9 plane. The plane safely made an emergency landing and no one was seriously injured.
The memo noted the results of a May 2024 employee survey that found only 47% of workers answered favorably to the statement, “Schedule pressures do not cause my team to lower our standards.”
Training also remains a problem, the memo said.
“Boeing is failing to ensure many of their employees have the appropriate education, training, skills or experience to effectively perform their assigned tasks,” it read.
The subcommittee said Boeing failed to ensure that nonconforming parts are appropriately documented, stored and dispositioned so that they are not installed on aircraft.
Quality inspection procedures — and FAA review of those procedures — also raised questions as to the qualifications and independence of inspectors, the memo said.
“Boeing personnel are allowed to inspect the quality of their own work,” it read.
“These troubling and recurring safety deficiencies raise questions about the FAA’s ability to oversee the quality and safety of Boeing aircraft through effective and lasting enforcement,” the memo said.
Wednesday’s memo and Whitaker’s testimony are part of a wider inquiry that began on March 19, investigating Boeing’s safety and culture practices following whistleblower allegations.