PARIS (AP) — European air and defense company EADS, the parent company of Airbus, said Monday it is cutting 5,800 jobs over the next two years as part of a major overhaul to reduce costs and refocus on civil aviation.
The company said in a statement that the jobs would be eliminated from its corporate and space and defense divisions by the end of 2016. The many space and defense divisions will be combined into one arm, to be called Airbus DS.
EADS, which is changing its overall name to Airbus, is also getting rid of its corporate headquarters, just outside Paris, and moving staff to another site, also outside Paris.
The company had once sought to become less dependent on its civil aircraft business with a goal of increasing its defense business, maker of the A400M European freighter, to around half of total revenue. A major part of that plan was a proposed merger with British defense company BAE Systems. The merger would have created a company with a market value just shy of Airbus rival Boeing's and one with a more equal balance of civil aviation and defense. Currently, the civil aircraft business makes up almost 70 percent of EADS' group sales.
Objections from the French, German and British government scuttled the merger, and the global economic downturn, which forced governments to drastically cut military spending, has made the defense business a much more difficult one.
Meanwhile, as the emerging world takes to the skies, the civil aircraft business is thriving. Boeing, for instance, forecasts that over the next 20 years the global demand for new airplanes will exceed 35,000 aircraft, valued at $4.8 trillion.
EADS' net earnings rose 45 percent in the third quarter, to 436 million euros.