By Tim Hepher

PARIS (Reuters) – Airbus announced just over 2,000 job cuts in Defence and Space, or about 5% of its second-largest division, as it reels from U.S. competition in the satellites sector but the cuts were not as severe as the European group had first warned.

More than half of the 2,043 total job reductions, affecting 1,128 positions, will fall in the Space Systems business following heavy losses on satellites, Europe’s largest aerospace group said, adding there would be no compulsory redundancies.

Airbus builds satellites and transporters and has key shares in European missile, fighter and space-launch programmes.

It brought forward a statement confirming the figures after Reuters reported the cuts, following the first of two days of closed-door briefings for the aerospace company’s unions on the results of a lengthy efficiency review.

In October, Airbus announced plans to cut up to 2,500 jobs in Defence and Space, or 7% of the workforce, after 1.5 billion euros of writedowns in satellites led by troubled OneSat.

In the plans outlined to unions to Wednesday, and later confirmed by the company, Airbus is cutting 250 jobs in its Air Power or combat aircraft sub-division and 47 in Connected Intelligence. The divisional headquarters will shed 618 posts.

Europe’s top satellite makers have traditionally focused on complex spacecraft in geostationary orbit but have been hit by the arrival of cheap tiny satellites in low Earth orbit, led by the runaway growth of Elon Musk’s Starlink constellation.

The job cuts are separate from proposals reported by Reuters on Tuesday to forge a new European satellites champion pooling activities of Airbus, Thales and Leonardo to help compete with Starlink, code-named “Project Bromo”.

But together, they represent a multi-speed effort to bring Europe’s struggling space sector into shape to face competition.

The job cuts are due to be implemented by mid-2026 and take aim at overheads and fixed costs by focusing mainly on white-collar and management positions, rather than operational ones.

CORE NATIONS

Germany will bear the largest share of the overall cuts with 689 positions affected, followed by France with 540, Britain with 477, Spain with 303 and other non-core nations with 34.

The four nations founded Airbus over 50 years ago and the share of any cost cutting is a politically sensitive topic.

Airbus has group headquarters in France where most of its jetliners are built, but Germany is home to its defence and space operations. Military transport aircraft are assembled in Spain, with Britain focusing on satellite payloads and communications.

Governments of the four host nations – including France and Germany which each own 11% of Airbus – have been briefed on the cuts, which are part of a reorganisation plan called Proton.

The proposed reductions amount to approximately 5% of the division’s workforce, Airbus said. The percentage implies that the divisional headcount may have risen slightly this year, with the cuts representing 6% of published staffing at end-2023.

Union officials were not immediately available to comment.

France’s Thales, which has two alliances with Italy’s Leonardo in satellites and services, is also in talks with unions over plans to cut 1,300 space-related positions.($1 = 0.9489 euros)

(Reporting by Tim Hepher; Editing by Jane Merriman, Richard Lough, Elaine Hardcastle and Nick Zieminski)