Airbus Defence and Space Announces 2,500 Job Cuts Amidst Financial Woes

Airbus Defence and Space plans to cut 2,500 jobs by mid-2026, citing a challenging business climate in its space systems division. This decision is primarily driven by significant financial losses incurred in the first half of 2024, amounting to €989 billion ($1.1 billion). These losses are attributed to delays, management issues, and cost overruns in several satellite programs, particularly the OneSat project.

OneSat, a complex, software-defined geostationary orbit communications satellite program, has been a major financial burden, contributing €600 million ($650 million) in charges during 2023. Despite the financial loss, approximately eight satellites based on the OneSat platform have been ordered from various customers including Intelsat, Thaicom and Optus.

Additionally, the company's A400M military transport aircraft program suffered a €477 million ($511 million) loss last year. The storied program has faced years of delays, cost overruns, and financial losses. However, Airbus expects that the A400M has now matured to a point where it will generate positive income in the future.

"In recent years, the defense and space sector and, thus, our Division have been impacted by a fast-changing and very challenging business context with disrupted supply chains, rapid changes in warfare and increasing cost pressure due to budgetary constraints," said Mike Schoellhorn, Airbus Defence and Space CEO. "While transformation efforts initiated in 2023 have started bearing fruit, particularly on operational performance and risk management, we are now taking the next steps, not least to adjust to an increasingly difficult space market. We want to shape the Division so it can act as a leading and competitive player in this ever-evolving market. This requires us to become faster, leaner and more competitive."

Under this latest restructuring effort, Airbus Defence and Space plans to reorganize its organization, particularly focusing on headquarters functions. The company will also implement full operational accountability for its business lines: Air Power, Space Systems, and Connected Intelligence. These changes are expected to reduce 7% of the unit's current workforce, which is approximately 35,525 employees, by mid-2026.

Over the coming months, the restructuring plan will be finalized through extensive negotiations with unions and representatives from the affected countries. Given the significant job losses and potential economic impacts, these discussions are expected to be politically challenging and contentious.