PARIS, France—Airbus announced plans today to reduce its workforce by up to 2,500 jobs in its Defence and Space division, citing a "complex business environment," particularly in its loss-making satellite sector. The job cuts, which represent 7% of the division’s workforce, are expected to be completed by mid-2026, following negotiations with unions.

The European aerospace giant, known for building satellites and transporters, has faced significant financial challenges, including €1.5 billion ($1.63 billion) in charges linked to its space systems, particularly the high-tech OneSat project, along with delays and rising costs in defense programs.

CEO Mike Schoellhorn emphasized the need for Airbus to become "faster, leaner, and more competitive" as it navigates an increasingly difficult space market. The company has already been conducting an efficiency review of the division, code-named ATOM, and is developing a turnaround plan for its struggling Space Systems business.

The restructuring will affect key locations in Germany, where the Defence unit is headquartered, and will involve months of negotiations with unions and host nations, including France, Germany, Britain, and Spain. Governments have been briefed on the restructuring, which follows an urgent cost containment plan launched in response to Airbus's critical financial situation.