Airbus, the European aerospace group, has announced plans to cut up to 2,500 jobs in its Defense and Space division. This decision comes after the company experienced significant losses in its satellites business. The job cuts represent 7 percent of the workforce in Airbus’ second-largest division and are expected to be carried out by mid-2026 following discussions with unions.
Airbus is involved in building satellites, transporters, and holds key shares in European missile, fighter, and space-launch programs. However, it has faced challenges recently with 1.5 billion euros ($1.63 billion) of charges in space systems due to delays and rising costs.
The job cuts were first reported by French news agency AFP and come as part of a larger efficiency review called ATOM that has been ongoing for over a year. Mike Schoellhorn, CEO of Airbus’ Defense and Space division, stated that these steps are necessary due to an ”increasingly difficult space market” and the need for increased competitiveness.
Specific turnaround plans have been developed for Airbus’ struggling Space Systems business without waiting for the outcome of satellite consolidation talks involving Italy’s Leonardo and France’s Thales.
While new provisions reflecting the costs of restructuring are expected, they will not be implemented immediately as Airbus is still assessing the impact. Analysts anticipate that most job losses will be covered through retirements or voluntary departures.
Airbus has been working diligently to gain a comprehensive understanding of losses embedded within complex forward services contracts for satellites like OneSat. A pre-results webcast indicated that there would be no new charges in third-quarter results.
The defense industry landscape has changed significantly following Russia’s invasion of Ukraine in 2022. Although European nations have increased defense spending since then, much of it has gone to non-European suppliers rather than traditional players like Airbus who focus on large platforms such as military aircraft.
Analyst Sash Tusa from Agency Partners noted that while there hasn’t been an upside for military aircraft producers from Ukraine specifically, opportunities lie within munitions and missiles sectors instead.