Airbus plans to lay off up to 2,500 workers in its defense and space division

London
CNN
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Airbus has announced plans to cut up to 2,500 jobs in its defense and aerospace division, citing a “complex business environment” marked by challenges including rising costs and “rapid changes in warfare.”

The European aerospace giant, which competes with beleaguered Boeing (BA) in aircraft manufacturing, said on Wednesday that it expects to complete the layoffs by mid-2026. The company did not say in which countries the cuts – which represent about 1.7% of GDP – would take place. . Its total workforce – will be manufactured.

Mike Schoelhorn, CEO of Airbus Defense and Space, said the sector – and by extension the division – faced a “rapidly changing and extremely challenging business context with disrupted supply chains, rapid changes in warfare and increasing cost pressure due to budget constraints”. ”

The cuts are part of a broader restructuring process aimed at making the unit “faster, leaner and more competitive,” Schoellhorn said in a statement.

Airbus’s announcement comes against the backdrop of ongoing change in the global defense and aerospace industry, presenting challenges and opportunities for companies.

Governments have stepped up defense spending in recent years as security threats spread, including a large-scale Russian invasion of Ukraine in 2022. The United States is also “investing heavily” in space assets to support intelligence collection and warfare, according to Reuters. A report this month by analysts at Citi.

But large legacy defense companies such as Airbus, which should benefit from a boom in demand, face stiff competition. “A cadre of new companies has emerged as alternatives to traditional suppliers to rapidly develop and deploy ‘next generation’ capabilities,” the analysts wrote.

The planned job cuts at Airbus are not the first sign of trouble at the planemaker, which, along with Boeing, dominates global production of full-size commercial aircraft. In June, Airbus said supply chain issues had forced it to reduce the number of planes it expects to manufacture this year and next.

But the problems with its competition are much greater. Boeing said earlier this month that it would cut 10% of its global workforce in the coming months. The company’s defense business posted a loss of $913 million in the three months to the end of June. In September, Ted Colbert, head of the unit, called Defense, Space and Security, resigned.

Boeing has posted underlying operating losses of more than $33 billion since 2019, and has attracted regulatory scrutiny after a series of serious and sometimes fatal safety lapses in recent years. About 33,000 of its workers are also currently on strike over wages and conditions.

Olesya Dmitrakova contributed reporting.