Airbus has announced plans to reduce 2,043 positions within its Defence and Space division, representing approximately 5% of the workforce in its second-largest business unit. The cuts aim to address financial losses and intensifying competition in the satellite market, while sparing employees from compulsory redundancies.

The restructuring, part of a broader reorganisation initiative known as Proton, comes after €1.5 billion in writedowns related to the company’s satellite operations, including challenges with its OneSat program. Airbus’s decision to reduce its workforce follows a comprehensive review of operational efficiency and reflects shifting dynamics in the aerospace industry.

Of the total reductions, over half—1,128 positions—will come from the Space Systems business, which has been hit particularly hard by rising competition from smaller, low-cost satellites in low Earth orbit, such as Elon Musk’s Starlink constellation. Other affected areas include 250 positions in Air Power (combat aircraft) and 47 roles in the Connected Intelligence unit. The division’s headquarters will lose 618 jobs.

Airbus emphasized its commitment to supporting affected employees, offering severance packages, career assistance, and continued health plan benefits for a transitional period.

The job cuts are distributed across several Airbus hubs, with the largest impacts in:

• Germany: 689 positions
• France: 540 positions
• United Kingdom: 477 positions
• Spain: 303 positions

Smaller reductions, totaling 34 jobs, will occur in non-core regions. These figures underscore the delicate balance Airbus must maintain between its operational priorities and the political sensitivities tied to its four founding nations—France, Germany, Spain, and the United Kingdom—all of which play pivotal roles in the company’s operations.

The Defence and Space division, while integral to Airbus’s identity, has faced growing headwinds. Historically focused on large, complex satellites for geostationary orbit, the division has been slow to adapt to the rapid growth of smaller, cheaper satellite networks. The rise of private-sector players like SpaceX has intensified pressure on traditional aerospace firms, forcing Airbus to recalibrate its strategy.

The Proton reorganisation reflects the need to address inefficiencies and sharpen competitiveness in an evolving market. Airbus also confirmed that the planned cuts are lower than an earlier estimate of 2,500 positions outlined in October, signaling some adjustment based on internal and external feedback.

Governments in France and Germany—each holding an 11% stake in Airbus—have been briefed on the plans, and union representatives participated in recent discussions. While unions have yet to formally respond, Airbus’s decision to avoid mandatory layoffs may ease tensions.