Airbus intends to redundancy up to 2,500 employees in its defense and aerospace sector.
The major European aeronautics company, consistently locking horns with ailing Boeing (BA) in aircraft manufacturing, declared on Wednesday that it's targeting to finalize the round of layoffs by mid-2026. The firm has remained tight-lipped regarding the specific countries where these layoffs, accounting for approximately 1.7% of their overall labor force, will take place.
Mike Schoellhorn, the CEO of Airbus Defense and Space, identified the sector and consequently the division as confronting a demanding business environment marked by swift changes, disrupted supply chains, dynamic shifts in warfare tactics, and escalating budgetary constraints.
These layoffs form part of a broader strategic overhaul, with Schoellhorn's intent being to transform the division into a more agile, slender, and competitive entity.
Airbus' announcement surfaces amidst turmoil in the global defense and aerospace sector, offering both hurdles and prospects for companies.
Recent years have witnessed governments boosting defense spending due to the escalation of various threats, including Russia's full-scale invasion of Ukraine in 2022. Furthermore, the United States has shown significant investment in space-based assets to facilitate intelligence gathering and warfare, as indicated by a report this month from Citi analysts.
However, this growth sector presents substantial challenges for legacy defense firms such as Airbus, which should stand to gain from the upsurge in requirement. As noted by these analysts, a plethora of new ventures have emerged as potential competitors within the swift production and deployment of advanced capabilities.
Airbus' announcement of planned job reductions is not an uncommon sight at the manufacturer, which, alongside Boeing, commands the global production of large-scale commercial jets. In June, Airbus disclosed that supply chain complications had compelled a reduction in the number of jets it plans to manufacture this year and the following one.
Meanwhile, Boeing confronts far more significant problems. Earlier in August, Boeing announced intentions to downsize its global workforce by 10% over the coming quarters, with its defense division recording a $913 million loss in the July–September quarter. The head of its Defense, Space & Security sector, Ted Colbert, also stepped down in September.
Boeing has incurred core operating losses beyond $33 billion since 2019 and is under scrutiny by regulatory bodies following a series of severe, sometimes fatal safety lapses in recent times. Additionally, around 33,000 of its workers are currently engaged in a strike over compensation and working conditions.
Olesya Dmitracova contributed reporting.
The business environment for Airbus' defense and space division is challenging, with swift changes, disrupted supply chains, and escalating budgetary constraints. This challenging business environment has led to Airbus' decision to undergo a strategic overhaul, aiming to transform the division into a more agile, slender, and competitive entity.
