EADS to Lay Off 5,800 Employees

European Aeronautic Defense and Space Company (EADS), the parent company of Airbus, announced on July 31st 2015 that it has changed its corporate name to Airbus Group. It will lay off 5,800 employees and close several factories based in Europe. It is estimated that 1,700 employees in France and 2,600 employees in Germany will be laid off. When the corporate restructuring is completed next January, the defense and aeronautic sectors of the group will be combined as one business sector, meaning the 4 sectors within the group will become 3 sectors only.

The layoff decision of EADS this time is for increasing the competitive edge of the group. Considering the factor of “region”, the number of employees in France who will be laid off is lower than that in Germany, as the HQ for its defense and aeronautic businesses are both located in Mureaux and Elancourt within the Great Paris Area. The Munich-based Unterschleissheim factory for military business is going to be closed.

In response to the impacts such as export decline and the cut-down on budgets of the EU, CEO Tom Enders of EADS said that the increase in the competitive edge of aeronautic and defense sectors must not be delayed. He added that the company has reduced the spending, simplified the product range, and tried to save energy resources, on the other hand, the company has also tried to restructure the internal organizational sectors for more efficient and effective operational management as well as the focus on new product R&D.

The largest labor union in EADS condemned the Group’s making such a decision based only on the finance reason and said that it should not lay off employees. The management from EADS, however, responded that all employees should unite and work together to get through the current harsh time.