Airbus Plans to Cut over 2,300 Jobs, Citing 'Weak Sales' Reason

Airbus Plans to Cut over 2,300 Jobs, Citing 'Weak Sales' Reason

After Thales Alenia Space and Maxar's announcement of layoffs of the job of 6 percent and 3 percent respectively, Airbus Defence and Space becomes the third satellite manufacturer to announce layoffs in the past 12 months

Fremont, CA: Citing the reason ‘weak sales’, Airbus Defence and Space plans to cut down around 7 percent of its workforce. According to a statement by Airbus Group, the company will cut 2,362 positions because of 'lower performance in space.'

Specialized in building satellites and rocket hardware, Airbus Defence and Space also makes drones and military aircraft. Airbus Group CEO Guillaume Faury pointed out "lower performance in space" and "efforts to support sales" as chief contributors to a 40 percent drop in the division's earnings before interest and taxes (EBIT). Faury also added "postponed contracts on the defense side" factor into the layoffs.

"Airbus Defence and Space's order intake and financial performance have been impacted and fallen short of our ambitions," Faury said during an earnings call. "As a result, we are targeting a restructuring program to our cost structure and to restore profitability to high single-digit margins."

Airbus Defence and Space earned 26 percent of revenue from Space, which stood at 11.8 billion USD in 2019. The revenue is 1.4 percent less than the previous year. The adjusted earnings before interests and taxes were around 623 million USD, down from 1.03 billion USD in 2018.

According to reports, Airbus Defence and Space has more than 1,30,000 employees from more than 30,000 of Airbus Groups. It is not yet revealed how many space jobs would be cut.

After Thales Alenia Space and Maxar's announcement of layoffs of the job of 6 percent and 3 percent respectively, Airbus Defence and Space becomes the third satellite manufacturer to announce layoffs in the past 12 months.

The drastic fall in the geostationary satellite orders has affected the satellite manufacturer around the globe to a large extent. Only in the last year, it saw an upward curve with 15 commercial competed geostationary communications spacecraft being ordered by satellite operators, which is double the number of orders from the previous year.

Out of the planned cuts, Germany would face the highest number of job cuts–829 because of the government's ban on weapons exports to Saudi Arabia, which hampered sales a lot. Spain is next with 630 proposed job cuts, followed by 404 in France, 357 in the United Kingdom, and 142 in rest of the countries.

See Also :- Top Space Technology Companies

 

Weekly Brief