BAE Systems 'streamlining' will see almost 2000 jobs axed
BAE Systems will cut 1,925 jobs from its UK workforce as the giant defence contractor attempts to keep production "at competitive costs".
Aerospace and Defence
11,557.12
17:14 04/10/24
BAE Systems
1,297.00p
17:15 04/10/24
FTSE 100
8,280.63
16:49 04/10/24
FTSE 350
4,570.17
17:14 04/10/24
FTSE All-Share
4,527.24
16:54 04/10/24
Following rumours of a massive round of 1,000 job cuts a day earlier, the FTSE 100-listed group announced plans mid-morning on Tuesday to axe 1,400 roles from its Military Air & Information business as it lowers production rates for the Typhoon and Hawk jet fighters, 375 from Maritime Services and a further 150 from Applied Intelligence.
The changes will "drive competitiveness… accelerate technology innovation… and deliver continued improvements in efficiency and operational excellence", the company said.
As part of a "streamlining" of the organisation by new chief executive Charles Woodburn, the oil executive who joined last year as chief operating officer and was promotion to CEO this June, the management structures of the current Platforms & Services UK and international businesses will be removed, with new "and strengthened" Air and Maritime units created.
BAE said the changes did not effect its 2017 earnings, which remained for earnings per share to be up 5-10% on last year's 40.3p, with net debt to be reduced slightly.
A new role of chief technology officer has been created "to enable more effective prioritisation, investment and exploitation of technology", while finance director Peter Lynas will take on extra responsibility for UK shared services, procurement and mergers and acquisitions on top of his existing tasks.
Although an order for 24 Typhoon and six Hawk aircraft was won from Qatar last month, BAE has been downplaying the importance of the Eurofighter Typhoon to its business since the summer, with the fighter jet having been flying since the late 1980s and Woodburn and Lynas both pointing to the increase in work on Lockheed Martin’s F-35.
Berenberg analysts forecast BAE’s Typhoon exports will halve in 2018 and again in 2019.
Trade union Unite said on Tuesday it would "fight for every job" at BAE, with assistant general secretary Steve Turner saying the job cuts "will not only undermine Britain’s sovereign defence capability, but devastate communities across the UK who rely on these skilled jobs and the hope of a decent future they give to future generations".
He added: “Unite will not stand by and allow the defence of our nation to be outsourced abroad. These devastatingly short sighted cuts will harm communities, jobs and skills. Unite will fight for every job and support every community under threat in both BAE's aerospace and marine divisions.
"These are world class workers with years of training and expertise on which an additional four jobs rely upon in the supply chain."
The union feels too much taxpayers' money on defence spending finds its way overseas, calculating that a quarter of UK defence spending will find its way to American factories by 2020.
"The British government can and should do more to defend UK defence jobs by investing in Britain and committing that long term projects, such as the next generation jet fighter, future support vessels and Type 31e frigate are built here in the UK," said Turner.
Defence secretary Michael Fallon recently said Britain should increase its defence spending target above the current 2% of GDP and announced a £1bn support package for the Royal Navy fleet.
In September the government's National Shipbuilding Strategy was published, confirming a commitment to build eight Type 26 Frigates at BAE's Glasgow shipyards and continued support for export opportunities.