BAE Systems follows US Navy, announces job cuts in Virginia

British multinational defence company BAE Systems in its preliminary full year report announced it would reduce workforce in Norfolk, Virginia as the U.S. Navy is redeploying ships to the west under its Asia-Pacific Rebalance 2025.

Under the rebalance which aims to reorient the U.S. foreign policy towards the Asia-Pacific region, many U.S. Navy ships are set to be homeported in the nation’s western naval bases which will in turn leave BAE’s Norfolk shipyard with a reduced amount of work. The exact number of people who will lose jobs was not specified.

The company also said these circumstances contributed to the estimate that sales for the next year are expected to be 10% lower.

BAE Systems however noted that it is preparing for the shift with a $100 million capital investment program that was underway at its San Diego, California shipyard.

The company otherwise reported a successful year with sales increased by £1.3bn (approx. $1.86bn) to £17.9bn ($25.5bn) compared to last year’s £16.637bn.

The EBITDA was reduced by £19m, to £1,683m, impacted by both the previously announced Typhoon production slowdown and Australian shipyard impairment and rationalisation charges while the large order backlog of £36.8bn was interpreted as “underpinning confidence in the future prospects for the business.”

Ian King, Chief Executive, BAE Systems, commented: “BAE Systems has a large order backlog generated by a well-balanced portfolio of businesses serving the needs of customers in many of the world’s larger accessible markets. The Group is well placed to continue to generate attractive returns for shareholders as defence budgets recover and our commercial adjacencies of cyber and commercial electronics continue to grow.”