European aerospace company, Airbus, has announced plans to lay off 2,500 employees in its space and defense division as part of efforts to enhance performance in the sector. The company revealed that it will be implementing additional organizational changes to address challenges faced by its defense and space division, which include disruptions in the supply chain, evolving warfare tactics, and rising costs.
Airbus had initiated organizational changes within the division last year, and according to the company, these changes have started to show positive results. Mike Schoellhorn, the CEO of Airbus’s defense and space division, stated, “We want to shape the division so it can act as a leading and competitive player in this ever-evolving market. This requires us to become faster, leaner and more competitive.”
The struggle within the defense and space division was highlighted by a 477 million euro loss on the A400M military transport plane, attributed in part to high inflation. Additionally, setbacks in the European space sector, such as the loss of access to Russia’s Soyuz rocket launchers and the failure of a Vega-C rocket launch, have impacted the division’s performance.
On the other hand, Airbus has been experiencing significant success in its commercial aircraft business, surpassing Boeing in plane orders and deliveries for five consecutive years, with soaring profits. However, the company has been grappling with meeting the high demand for commercial airplanes, evident from its backlog of 8,585 commercial aircraft orders as of June.
Meanwhile, Boeing has faced its own challenges, with ongoing repercussions from the crashes involving its Max jets in 2018 and 2019. Recent incidents, including a door plug blowing out of an Alaska Airlines 737 Max 9, have further strained Boeing’s operations, leading to decreased aircraft deliveries and financial losses. The competition between Airbus and Boeing remains fierce in the aerospace industry.
With Airbus employing over 150,000 individuals globally, the impact of the layoffs on the workforce is significant. As both aerospace giants navigate through their respective challenges, the industry continues to evolve with implications for the future of air travel and defence technologies.