After Boeing… Airbus will cut 2,500 jobs economy

Airbus announced its intention to reduce up to 2,500 jobs by mid-2026 in its faltering defense and space division, which faces a “complex economic environment.” These reductions represent about 7% of the workforce in the unit, whose number of employees is approximately 35,500 people, according to its report. Last annual.

Airbus produces satellites and transport aircraft and plays a major role in European missile, fighter and space programmes.

The company has been affected by costs worth 1.5 billion euros ($1.63 billion) in space systems in the past few quarters, led by the technologically advanced Wansat project, as a result of delays in delivery and the high cost of defense.

The job cuts come after a more than year-long review of efficiency in the Defense and Space Unit.

Airbus’ move comes days after its main American competitor, Boeing, announced plans to reduce up to 10% of its workforce, or about 17,000 jobs, as the new CEO seeks to improve the company’s financial situation amid the safety crisis and factory workers’ strike.

Challenges

Airbus’ Defense and Space division faces major challenges, including rapid advances in technology, declining government spending, and the emergence of new competitors in the satellite and spacecraft market.

“The rapidly changing and extremely challenging commercial context… requires us to become faster, cheaper and more competitive,” Michael Schollhorn, head of Airbus’ Defense and Space division, told the Wall Street Journal.

In 2023, Airbus recorded losses worth 600 million euros ($650 million), due to delays in the aforementioned department.

In July this year, the company recorded an additional cost of 989 million euros ($1.075 billion) after re-evaluating the costs and timelines of a number of communications, navigation and space surveillance programmes.

CEO Guillaume Faury explained in July that the company faces greater competition from “some disruptive new players, especially one player.”

As part of its efforts to strengthen the division, Airbus has appointed one of its commercial aircraft industry veterans, Alan Furey, to lead its space programmes. But on the defense side, the division has not seen the same increase in orders as other European manufacturers in recent years, as orders have been more focused on ground equipment such as armored vehicles and artillery, according to the Wall Street Journal.