Facing Satellite Competition from Elon Musk’s Starlink Constellation

Airbus recently announced that it will be cutting more than 2,000 employees from its Defense and Space sector. This decision comes amid heavy competition from Elon Musk’s ever-growing Starlink constellation.

The jobs represent around 5% of Defense and Space, Airbus’s second-largest department. This is significantly lower than projections from October, which forecasted 2,500 positions. Still, the cuts are likely to stir some drama with the manufacturer’s unions and various government agencies.

The cuts follow a rough few years for OneSat, Airbus’s family of mid-market geostationary satellites. It was launched in 2019 alongside Inmarsat. However, as satellite communications became more popular, OneSat was unable to stand against lower-cost competitors. Elon Musk’s Starlink constellation was especially troublesome.

In total, the project has busted upwards of $1.6 billion. This eventually led Airbus to look for ways to cut costs. 

"While transformation efforts initiated in 2023 have started bearing fruit, particularly on operational performance and risk management, we are now taking the next steps, not least to adjust to an increasingly difficult space market,” noted Mike Schoellhorn, Airbus Defence and Space CEO. “We want to shape the Division so it can act as a leading and competitive player in this ever-evolving market. This requires us to become faster, leaner and more competitive."

Over half of the 2,043 cuts, stemming from 1,128 positions, are from the Space Systems business. 250 jobs are being cut from Air Power and combat aircraft, along with 47 in Connected Intelligence and 618 from HQ. The largest share of positions, 689, are from Germany.

The cost reductions are part of Proton, the manufacturer’s reorganization strategy. Airbus is still looking to maintain its satellite presence by partnering with Thales and Leonardo. These aerospace companies have created “Project Bromo” to boost Europe’s space division and fight back against Starlink's dominance.

FMI: www.airbus.com