European air and defence 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 defence divisions by the end of 2016.
The many space and defence 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.
Currently, the civil aircraft business makes up almost 70 per cent of EADS' group sales.
The global economic downturn, which forced governments to drastically cut military spending, has made the defence 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 US$4.8 trillion.
EADS' net earnings rose 45 per cent in the third quarter, to euro436 million. But CEO Tom Enders said Monday that the cuts were necessary if the company is going to compete and attract defence and space customers in growing markets outside Europe, which is not doing as well.
The company, which has most of its operations in France, Germany, Spain and Britain, did not specify where the cuts would be made.