December 09, 2013
Credit: Airbus Military
Over the next three years European aerospace and defense giant EADS will reduce its head count by 5,800 — including up to 1,450 layoffs — as part of a plan to put its defense and space business in line with projected revenues, the company announced Dec. 9.
The plan, presented to the group’s European Works Council, follows a July decision by the EADS board of directors to consolidate its Cassidian, Airbus Military and Astrium units into a single Airbus Defense and Space Division (Airbus DS), and to rebrand the company as the “Airbus Group.”
The restructuring will reduce the number of industrial facilities the company currently operates in Germany, France, the U.K. and Spain, and include the cutting of 5,800 positions at Airbus DS and in corporate and headquarters functions through 2016.
“The situation is extremely dramatic,” said Bernhard Gerwert, who has been named chief executive of Airbus DS, which is expected to begin operations in January. Gerwert said EADS must undertake the same measures as those of its U.S. competitors and realign defense activities to account for an expected long-term drop in demand by European governments. “We face huge competition, that is why we have to react now.”
As part of the restructuring, up to 1,500 positions will be offered at Airbus and Eurocopter to accommodate affected employees. Around 1,300 temporary contracts will be allowed to expire without renewal. Along with voluntary departures, layoffs are estimated in the range of 1,000-1,450 employees, depending on the number of voluntary departures.
As part of the overall head count reduction, corporate functions and services will be slimmed down by around 500 positions.
The timing and size of a one-off charge associated with the new plan is being evaluated, the company said.
EADS CEO Tom Enders said despite the changes, the company has no intention of exiting the defense business.
“We have deliberately, consciously decided to stick with our defense business, our space business, but to make it stronger,” he said, adding that the head count reduction is not expected to begin until mid-2014, Enders said. “We need to create operational and market synergies between our product portfolio, and all these measures — including the head count reduction — should give us the competitiveness we need in order to prevail and be successful in the defense and space business tomorrow.”