Shares in BAE Systems (LON:BA) have fallen into the red today as the defence giant announced that it will slash nearly 2,000 jobs, confirming earlier reports. The news came as the company updated investors on its recent performance.
As of 10:27 BST, BAE Systems’ share price had given up 0.89 percent to 613.00p, underperforming the broader UK market, with the benchmark FTSE 100 index having climbed into positive territory and currently standing 0.15 percent higher at 7,519.44 points. The group’s shares have added more than 11 percent to their value over the past year, and are up by some three percent in the year-to-date.
BAE unveils nearly 2,000 job cuts
BAE Systems disclosed in a statement today that it was planning to cut almost 2,000 jobs in military, maritime and intelligence services. The group said that it was planning to reduce the workforce of the Military Air & Information business by up to 1,400 roles. Another 375 roles are expected to go at its Maritime Services business, while the defence giant Applied Intelligence division has announced a proposed workforce reduction of up to 150 roles.
The move has been prompted by a lack of orders for BAE’s Eurofighter Typhoon jets, with a large order expected from Saudi Arabia failing to materialise.
“Britain is buying fewer jets today than it ever did. You’ve got to adapt to the future,” Howard Wheeldon, an independent defence analyst, told BBC Radio 4’s Today programme earlier today.
Defence giant reiterates full-year outlook
The announcement of the proposed job cuts came as BAE updated investors on its recent trading, noting that its outlook for the current year remained unchanged. The defence giant continues to expect its underlying earnings per share to come in at between five percent and 10 percent higher than full-year underlying earnings per share in 2016 of 40.3p and continues to expect a small reduction in net debt compared with 31 December 2016.