As Boeing Co. BA grapples with a prolonged strike by its factory workers, Airbus SE EADSY has reportedly decided to cut up to 2,500 jobs in its Defence & Space division. This move comes in response to significant financial setbacks in its satellite projects.
What Happened: The European aerospace leader plans to implement these reductions, representing 7% of the division’s workforce, by mid-2026. The information was disclosed by two anonymous sources, as the official announcement is still pending, Reuters reported on Wednesday.
Meanwhile, Boeing’s workers, demanding better wages and pensions, have entered the second month of their strike. A significant rally was held in Seattle, increasing the pressure on CEO Kelly Ortberg to address the workers’ demands. Despite Boeing’s recent announcement of 17,000 job cuts, the workers remain resolute. Washington state Congressional Democrats have urged both Boeing and the union to reach a fair agreement, acknowledging the workers’ vital contributions.
Why It Matters: The aerospace industry is currently navigating a challenging landscape. Airbus recently secured 85 new orders, including a significant purchase from Air India Ltd., highlighting its ongoing demand. However, the decision to cut jobs reflects the financial pressures in its Defence & Space division.
Meanwhile, aerospace stocks have seen impressive returns, with the iShares US Aerospace & Defense ETF ITA showing a 22% year-to-date increase in 2024. Analysts, like RBC’s Ken Herbert, have noted the industry’s strong performance but question whether companies like Boeing and Airbus can sustain their high valuations amid geopolitical tensions.
Price Action: As per Benzinga Pro, Airbus stock closed at $36.91 on Tuesday while Boeing closed at $36.85.
Read Next:
Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
Image via Shutterstock
Market News and Data brought to you by Benzinga APIs
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
