Babcock International Group is to cut 1,000 jobs.
A Business Update on the company’s website states the company’s intention to reduce its overall operating cost base, resulting in the loss of around 850 jobs in the UK, with the remainder overseas.
Babcock employs 30,000 people, who are mostly UK-based. The engineering company has contracts in the aerospace, defence, emergency services and nuclear power sectors, with the Ministry of Defence as its biggest customer.
Babcock said it was reducing management layers to create a “more efficient and effective” structure. The job cuts followed a review which also included the sale of different parts of the business, including the conditional sale of its oil and gas aviation business, worth around £400m over the next 12 months as well as £1.7bn accounting costs.
Restructure will create “more effective and efficient company”
Chief executive David Lockwood said: “We are creating a more effective and efficient company through our new operating model and, in line with our new strategic direction, will rationalise the group’s portfolio to help strengthen our balance sheet. Through our new operating model, the future Babcock will be a better place to work, a better partner to our customers and will be well placed to capture the many opportunities ahead of us.”
Babcock will publishing further details in its full-year financial results, adding that it was “cautious” about progress and describing this year’s trading conditions as a “year of transition”. The Update added that Babcock expects to play a “crucial role” as a partner to the UK government across key defence programmes including shipbuilding.
Babcock’s most recent half-year results, covering the six months to the end of September, reported a 64 per cent fall in pre-tax profits to £55.3m. Adaptions to working practices required during the Covid-19 pandemic had resulted in higher costs and the company had also been affected by weak trading across its civil aviation operations.
In its latest announcement, the company said it expected to post a 2 per cent fall in revenues and 36 per cent decline in operating profits for the year to the end of March.