Boeing (BA) shares fell in early trading Monday after the troubled plane maker announced a slew of cost-cutting measures and billions of dollars of upcoming charges, among the most radical measures by CEO Kelly Ortberg, who took the reins in August. 

Ortberg said in a memo to employees late Friday that the company is cutting around 10% of its workforce or 17,000 people “over the coming months,” and postponing the launch of its first 777x jetliner.

“Our business is in a difficult position, and it is hard to overstate the challenges we face together,” Ortberg said. “We need to be clear-eyed about the work we face and realistic about the time it will take to achieve key milestones.” 

Boeing To Take $5B in Q3 Charges

Boeing also said it expects to take a total of $5 billion in pre-tax earnings charges at its commercial airplanes and defense divisions in the third quarter. The company said it may report a loss of around $10 per share for the period.

The plane maker, which has faced a number of challenges since a door plug detached during an Alaska Airlines flight in January, was hit with a downgrade warning on its debt by ratings agency S&P Global last week after it withdrew its contract offer to its striking machinists.

Ortberg said Friday that with the planned layoffs, the plane maker wouldn’t “proceed with the next cycle of furloughs.” Boeing last month temporarily furloughed employees to preserve cash as the strike hit its business.

UBS Lowers Price Target for Boeing Stock

In a note Monday morning, UBS analysts lowered their price target for Boeing stock to $215 from $220 per share to reflect the lower cash flow in Boeing’s 2027 fiscal year from the charges and the delayed 777x jefliner. Still, UBS maintained its “buy” rating.

“We believe cost rightsizing and a narrower focus are necessary steps, but highlight the long road to recovery,” UBS analysts wrote. “A workforce reduction makes sense, with headcount 10% above 2018 while revenue is 30% below.”

Boeing shares, which fell close to 3% Monday morning to $147.41, are down more than 43% since the start of the year.

UPDATE—Oct. 14, 2024: This article has been updated to include comments from UBS and reflect more recent share prices.