Airbus plans to cut up to 2,500 jobs in its defense and space division

London (CNN) – Airbus announced plans to cut up to 2,500 jobs in its defense and space division, citing a “challenging business environment” marked by challenges including rising costs and “rapid changes in the military business.”

The European aerospace giant, which rivals Boeing (BA) in aircraft manufacturing, said on Wednesday it expects to complete layoffs by mid-2026. The company did not specify in which countries the cuts would be made, which amount to about 1.7%. your total workforce.

Mike Schellhorn, CEO of Airbus Defense and Space, said the sector, and therefore the division, faced a “fast-changing and highly complex commercial context, with disrupted supply chains, rapid changes in military affairs and increasing cost pressures due to budget constraints ”

The cuts are part of a broader restructuring aimed at making the division “faster, more efficient and more competitive,” Schoellhorn said in a statement.

Airbus’ announcement comes amid ongoing changes in the global space and defense industry, which pose both challenges and opportunities for companies.

In recent years, governments have increased defense spending as security threats grow, such as Russia’s large-scale invasion of Ukraine in 2022. The United States is also “investing heavily” in space assets to support intelligence gathering and warfare, according to a report released this month. by Citi analysts.

But traditional defense majors such as Airbus, which stand to benefit from booming demand, face stiff competition. “A group of new companies has emerged as an alternative to traditional suppliers to rapidly develop and introduce ‘next generation’ capabilities,” the analysts wrote.

The planned job cuts at Airbus are not the first sign of trouble at the planemaker, which, along with Boeing, dominates global production of full-size commercial jets. Airbus said in June that supply chain problems had forced it to cut the number of planes it plans to produce this year and next.

But his opponent’s problems are much more serious. Earlier this month, Boeing said it would cut 10% of its global workforce in the coming months. The company’s own defense business reported a loss of $913 million in the three months to the end of June. And in September, Ted Colbert, head of the company’s defense, space and security division, resigned.

Boeing has suffered operating losses of more than $33 billion since 2019 and has come under regulatory scrutiny after a series of serious and sometimes fatal safety lapses in recent years. Some 33,000 workers are also currently on strike over wages and working conditions.

—– Olesya Dmitrakova contributed to this report.