Airbus to fire 2,500 workers to streamline space, defense division

BLAGNAC, France: Airbus, the European aerospace giant, announced on October 16 that it plans to lay off 2,500 employees to turn around its struggling defense and space division.

The layoffs come amid ongoing challenges in the sector, including supply chain disruptions, rapidly evolving warfare technologies, and rising costs.

The company also indicated that additional organizational changes would be implemented, building on restructuring efforts last year, which Airbus said had already started delivering positive results.

"We aim to position the division as a leading and competitive player in this ever-changing market," said Mike Schoellhorn, CEO of Airbus's defense and space division. "To achieve that, we need to become faster, leaner, and more competitive."

The defense and space division has faced significant hurdles, including a 477 million euros ($511 million) loss on the A400M military transport plane, exacerbated by high inflation. Additionally, the European space sector was impacted by the loss of access to Russia's Soyuz rocket launchers and the failure of the Vega-C rocket shortly after its launch in late 2022.

While Airbus's defense and space unit has struggled, its commercial aircraft business has thrived, consistently outperforming its main competitor, Boeing. Airbus has led the industry in plane orders and deliveries for five consecutive years, and as of June, the company had an order backlog of 8,585 commercial aircraft.

Meanwhile, Boeing has continued to grapple with setbacks, including issues related to its 737 Max jet, which was involved in two fatal crashes in 2018 and 2019. Manufacturing slowdowns ordered by the U.S. Federal Aviation Administration and airline compensation payments have further hindered Boeing's recovery.

Airbus, which employs over 150,000 people globally, is seeking to strengthen its defense and space division while maintaining its leadership in the commercial aircraft sector.