EADS to cut more than 5,000 jobs across Europe in restructuring as arms budgets fall

 

EADS, the aircraft manufacturer which last year was forced to scrap a merger with British defence giant BAE Systems, is cutting 5,800 jobs as it attempts to cope with governments slashing spending.

The losses represent around 4 per cent of EADS’s total workforce, with around 450 positions in the UK believed to be affected.

The cuts are part of EADS’s plan to merge its space and defence businesses, and are the latest in a sector damaged by defence spending being slashed across the globe.

Of the total number of jobs to go, 1,500 employees will be offered new positions, the company said.

After taking into account voluntary redundancies and temporary workers not having their contracts renewed, EADS expects compulsory redundancies to number between 1,000 and 1,450.

As well as the job cuts, the company also announced the sale of its Paris headquarters alongside a “substantial consolidation” of its sites in the UK, France and Germany.

In the UK, where it employs nearly 17,500 people across 32 sites, EADS said it was aiming “for a consolidation of activities” focused on its locations in Stevenage, Portsmouth and Newport “in order to maintain proximity to its key customers”. It added that functions “at smaller sites will be relocated to one of the three major sites”, although it gave no further details.

“We need to improve our competitiveness in defence and space – and we need to do it now. With our traditional markets down, we urgently need to improve access to international customers, to growth markets”, said Tom Enders, the chief executive.

“For that to work, we need to cut costs, eliminate product and resource overlaps, create synergies in our operations and product portfolio, and better focus our research and development efforts.”

EADS announced in July it was merging its defence and space businesses, and at the same time revealed it was changing its name to Airbus.

In a video published on EADS’s website yesterday, Mr Enders said that he expected the headcount to be reduced between the middle of next year and the end of 2016.

The French union Force Ouvrière warned that it reserved the right to carry out “any initiative” in its opposition to any involuntary redundancies.

The job losses come after last month BAE announced it was cutting 1,775 positions at shipyards in the UK and that shipbuilding would stop completely in Portsmouth, blaming a “significant” drop in demand. Meanwhile, in November the world’s largest defence group, Lockheed Martin, announced the loss of 4,000 jobs.

Mr Enders led the audacious move to merge with BAE last year, in an attempt to create a company big enough to take on US behemoth Boeing. However, the £30bn deal was scuppered by the inability of British, German and French politicians –and the two firms – to come to an agreement.

Mr Enders has since ruled out another attempt at the deal.

“This window is closed,” he told The Sunday Times in June. “Both companies have moved on. The opportunity we saw a year ago has gone for years.”

Last month Lockheed Martin announced it would be cutting 4,000 jobs due to the dramatic fall-off of US spending. Several plants in the US will be closed under the plan.

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