Airbus, the European aerospace giant, has announced plans to cut up to 2,500 jobs in its Defence and Space division as it grapples with a challenging business environment. The company attributed the job cuts, which will impact 7% of the division's workforce, to difficulties in its satellite segment and broader defense operations.
Airbus, known for its role in building satellites, military transporters, and its participation in missile and space-launch programs, aims to implement these reductions by mid-2026 following negotiations with unions.
The decision follows a series of financial setbacks for Airbus's Defence and Space unit, including charges totaling 1.5 billion euros ($1.63 billion) in recent quarters. These losses have been primarily linked to the OneSat project, a high-tech satellite initiative, and delays in defense contracts that have led to rising costs. The restructuring will build on a more than year-long efficiency review code-named ATOM, which has already been underway to address these issues.
Mike Schoellhorn, CEO of Airbus's Defence and Space division, emphasized the need for the company to streamline its operations. "In an increasingly difficult space market, it is crucial for us to become faster, leaner, and more competitive," Schoellhorn said in a statement. He underscored the importance of adapting to market challenges to position Airbus more favorably in a sector increasingly dominated by emerging space constellations and new players.
The job cuts will affect various parts of the business, including the Germany-based defense unit's headquarters, according to the company. Airbus, which has a strong presence in France, Germany, Britain, and Spain, has already briefed the governments of these host nations regarding the planned layoffs. Sources indicate that Airbus is preparing for extended negotiations with unions and officials from these countries to determine the specific locations and departments where reductions will occur.
This restructuring effort comes as Airbus attempts to counterbalance significant financial strains within its space systems business. The firm has faced a growing cost burden, prompting it to explore specific turnaround plans independent of ongoing satellite consolidation talks. These discussions involve other European industry players, such as Italy's Leonardo and France's Thales, but have yet to yield any concrete results.
The broader European defense sector has been under pressure, despite increased defense spending following Russia's invasion of Ukraine in 2022. Local defense firms, including Airbus, have expressed frustration over a lack of tangible benefits from these investments. Much of the recent re-armament spending has gone to U.S.-based defense suppliers, further challenging European companies like Airbus that are struggling to capture a larger share of defense contracts.
In addition to the job cuts, Airbus has launched an urgent cash containment plan across its Defence and Space unit. Reports from July indicated that internal assessments described the cost situation as "critical," necessitating immediate measures to stabilize the business. Group CEO Guillaume Faury previously noted that Airbus is actively seeking opportunities to scale up in defense, space, and especially satellites, where traditional firms have been disrupted by the rise of new satellite constellations.
The layoffs are part of Airbus's broader strategy to remain competitive against its global rival, Boeing, which has also been restructuring in recent months. Boeing recently announced its own significant round of job cuts, planning to reduce its workforce by approximately 17,000 roles. These layoffs are tied to ongoing production challenges and a strike at its key manufacturing plant near Seattle. The move highlights the broader struggles facing the aerospace sector as both companies navigate economic uncertainties, supply chain issues, and geopolitical tensions that have affected their respective businesses.
Airbus's announcement follows a period of financial turbulence. In its second-quarter earnings report, the company disclosed a 989 million euro ($1.08 billion) charge against its space division, citing an audit of costs and projected lower revenues. This news came after the company had already lowered its annual commercial aircraft delivery target to 770 jets from an earlier projection of 800. The adjustment was linked to the performance of its A320neo family of aircraft, which has maintained a lead over Boeing's 737 Max since 2019 but still faces production hurdles.
