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Boeing said Friday it would cut 10 percent of its workforce as the company expects a steep third-quarter loss due to a machinists’ strike in the Seattle area.

The aviation giant must “adjust our workforce levels to align with our financial reality,” said Chief Executive Kelly Ortberg, adding that the 17,000 job cuts worldwide “will include executives, managers and employees.”

The company announced a series of austerity measures and production delays after the nearly month-long strike by 33,000 workers added to the company’s litany of problems.

Boeing employees at the International Association of Machinists and Aerospace Workers quit their jobs on September 13 after overwhelmingly rejecting a contract offer.

IAM officials did not immediately respond to a request for comment.

Boeing, which has also faced intense scrutiny over safety lapses and commercial aviation stumbles in its Starliner space program, said the IAM strike contributed $3 billion in pretax charges to its commercial aviation results in the third quarter, Part of an expected loss of $2.5 billion $9.97 per share.

“As our company faces near-term challenges, we are making important strategic decisions for our future and have a clear vision of the work we need to do to restore our company,” Ortberg said in a press release.

“These decisive measures as well as important structural changes to our business are necessary in order to remain competitive in the long term.”

As a result of the strike, Boeing is postponing initial delivery of the 777X from 2025 to 2026. The severely delayed jet was originally scheduled to enter service in January 2020.

The company plans to end production of the 767 Freighter in 2027 once production on current orders is complete.

Ortberg also pledged to provide “additional oversight” of Boeing’s troubled defense and space businesses, which will suffer “significant new losses” in the third quarter, he said in the note to employees.

Ortberg joined Boeing in August after initiating a leadership change following an incident at Alaska Airlines in January in which a window exploded mid-flight and required an emergency landing on a 737 MAX, the plane that crashed into two fatal crashes in 2018 and 2019 was involved in crashes.

This led the Federal Aviation Administration to tighten oversight of Boeing’s production processes and limit the company’s output. Due to the IAM strike, production on the MAX has now stopped.

On Friday, a Texas judge heard arguments on whether to approve a U.S. Justice Department criminal settlement in the MAX case. Family members of MAX victims in the two crashes argued in court against the settlement, arguing that Boeing and former executives should be prosecuted in a public trial.

Meanwhile, the IAM strike has brought activity to a standstill at two assembly plants in the Seattle area. Workers are demanding steep wage increases and a reinstatement of pensions, complaining about more than a decade of nearly flat wages amid inflation.

After two days of unsuccessful negotiations, Boeing suspended talks on Tuesday, saying the union had made unreasonable demands and withdrew its offer. Boeing’s most recent offer included a 30 percent wage increase.

On Thursday evening, the IAM announced plans for a strike rally in Seattle, describing the gathering as “more than an event,” the IAM said on X.

“This is a strong statement to Boeing, the industry and every worker in this country – we will not back down!”

Boeing shares fell 1.9 percent in after-hours trading.

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