Airbus laid out on Wednesday plans to cut up to 2,500 jobs in its Defense and Space division, citing a "complex business environment," especially in loss-making satellites.
The European aerospace group said it aims to carry out the cuts, which represent 7% of the workforce in its second-largest division, by the middle of 2026 after talks with unions.
Airbus builds satellites and transporters and has key shares in European missile, fighter and space-launch programs.
It has been hit by 1.5 billion euros ($1.63 billion) of charges in space systems in recent quarters, led by the high-tech OneSat project, and delays and rising costs in defense.
The job cuts, first reported by Agence France-Presse (AFP), come on top of a more than year-long efficiency review in the defense and space business, code-named ATOM.
Mike Schoellhorn, CEO of Airbus's second-largest division by revenues, said it was time to take further steps notably in an "increasingly difficult space market."
"This requires us to become faster, leaner and more competitive," he said in a statement.
Airbus has been drawing up specific turnaround plans for its struggling Space Systems business without waiting for the outcome of recent satellite consolidation talks that include Italy's Leonardo as well as France's Thales.
Job cuts will also be felt in the Germany-based defense unit's headquarters.
Airbus is based in France with core operations also in Germany, Britain and Spain. Governments of the four host nations have been briefed on the restructuring plans, sources said.
Airbus now faces months of negotiations with unions and host nations on where the axe will fall in high-tech manufacturing.
Reuters reported in July that Airbus had launched an urgent cash containment plan across the Defense and Space unit, where managers have declared the cost situation "critical."
Group CEO Guillaume Faury said earlier this year that Airbus was looking at opportunities to create scale in defense, space and particularly satellites where traditional players have been heavily disrupted by the success of new constellations.
European nations hiked defense spending following Russia’s invasion of Ukraine in 2022 but the local defense industry has complained about the limited dividend for domestic producers, with significant re-armament spending going to U.S. suppliers.