Airbus Chief Warns Workforce That Cuts ‘Won’t Be Negligible’

(Bloomberg) -- Airbus Group SE’s plan to cut costs and streamline operations will have a significant impact on the aerospace group’s headcount, Chief Executive Officer Tom Enders has warned in a letter to employees.

Airbus, which had 137,000 workers worldwide in July, has already committed to curbing production of the A380 superjumbo amid a decline in sales and is also working on “necessary adaptations” to cope with shrinking helicopter demand, Enders says in the memo, a copy of which was obtained by Bloomberg News.

“The effects on workforce and cost base in both cases are not negligible,” the CEO says. Toulouse, France-based Airbus declined to comment on the letter, which is dated Sept. 20.

While Enders stops short of revealing how deep the cuts will go, he says there’ll be no “massive reductions” in headcount and that the plan will be far less severe than one introduced in 2007 which sought to eliminate 10,000 jobs and sell six plants to deliver 2.1 billion euros ($2.4 billion) in annual savings.

Enders said Sept. 19 that he planned to overhaul Airbus’s management and organization in an effort to reduce costs by eliminating duplication of roles and functions. The company has already boosted productivity at the operating level as it lifts production of both single-aisle and wide-body jets to record levels.

The restructuring will focus partly on tying the Airbus planemaking arm, which employs 55,000 people, more closely to its namesake parent, which also makes helicopters, satellites, space launchers, fighter planes and missiles. Changes to the “corporate setup” will involve further consolidation and cost-reduction at “the top of our company,” Enders says in the memo.

The sweeping Power8 program to which Enders referred ultimately surpassed its target, saving 2.5 billion euros annually at a cost of 8,000 jobs. Only two factories were actually sold, both in the U.K.