Spending cuts torpedo 1,300 jobs at BAE Systems

The spending cuts are taking their toll: defence firm BAE Systems admitted it would have to cut over 1,300 jobs as a result of the Government’s Strategic Defence and Security Review. Most of the jobs will go in Lancashire, Somerset, Greater Manchester, Rutland, Moray and Farnborough in Hampshire, it said, after the Government decided to take Harrier jets and Nimrod spy planes, two of its most high-profile aircraft, out of service. A reminder that the private sector won't be able to avoid the public sector pain altogether...

The two planes were among BAE’s most lucrative contracts: it was contracted to service the Harrier, which, having been in service for more than 40 years now, has become something of an icon. The Nimrod was also an essential part of its business: in fact, BAE had only recently been commissioned to manufacture nine new Nimrods for the RAF. But, having built two, which now won’t be put into service, the Government changed its mind and cancelled the contract. Wonder if there’s much chance of getting a refund on that?

BAE is trying to put a brave face on the whole thing, saying the job losses are ‘designed to ensure we remain competitive’ (which we’re sure will come as scant consolation to the staff being made redundant). But it has managed to avoid further job losses with its work on the Joint Strike Fighter, a new plane which is set to replace a range of aircraft in the US Air Force. While the UK has cut its order for the JSF, the US is still keen – which means as many as 3,000 of the aircraft could be manufactured. BAE has an 18% share in the programme.

Still, this is only the latest set of private sector redundancies arising from the Government's spending cuts (plans to build a £14m training academy in Wales, run by Qinetiq, were also scrapped as part of the SDSR). Which just goes to show that while the bulk of the redundancies will be in the public sector, the private sector certainly won't be able to escape the fall-out.