BAE Systems share price is heading lower Monday, following reports the UK defence giant is set to announce over 1,000 jobs cuts, later this week.
According to Sky News, who cited sources close to the situation, the firm’s Warton plant in Lancashire, north west England will bear the brunt of the job losses. There are expected to be job cuts elsewhere in the UK, too.
BAE Systems is the UK’s biggest manufacturer of arms, including fighter jets, missile launchers and cyber security systems. It currently employs some 34,600 in the UK. It’s global workforce totals around 80,000.
It’s understood the expected job cuts announcement isn’t related to Brexit. Rather, BAE Systems are reported to be axing workers due to a further slowdown in production of the company’s Eurofighter, Typhoon fighter aircraft.
Following a significant order for the aircraft from Qatar, BAE Systems is also said to be awaiting another large order from Saudi Arabia. However, the timing of that is as yet unknown, hence the planned slowdown in production.
The job cuts will likely be announced by chief executive Charles Woodburn, who took the role at BAE Systems just three months ago. Back in August, Woodburn said the company would need to monitor it’s Eurofighter production “very carefully”.
BAE Systems shares opened higher Monday, before quickly sliding to levels below Friday’s close.
While the Sky News report suggested the job cuts announcement was due Tuesday, there is also a possibility it will be brought forward to later Monday. And, in a comment to the UK’s Independent Newspaper, a BAE Systems spokesperson said:
“If and when there are any changes proposed we are committed to communicating with our employees and their representatives first”.
The news also follows a press release from the defence firm Friday, that jobs in Portsmouth had been safeguarded thanks to the extension of a Royal Navy contract. BAE Systems is now responsible for the maintenance and support of the HMS Queen Elizabeth and HMS Prince of Wales carriers.