ArianeGroup to shed 2,300 employees as Ariane 6 nears completion

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Updated at 5:06 p.m. Eastern.

WASHINGTON — European rocket-builder ArianeGroup will lower its headcount by 2,300 between now and 2022 as the new rocket it has been developing since 2014 nears operations.

“The end of the development of Ariane 6 and the need to increase competitiveness in the European rocket launch business compel ArianeGroup to reduce its capacity by the equivalent of 2,300 full-time jobs by 2022,” the company said in a statement.

ArianeGroup told SpaceNews that the reduction won’t involve any forced layoffs, but will be completed through a combination of employee retirements and the expiration of short-term contracts.

With the next-generation Ariane 6 holding to a 2020 maiden launch, ArianeGroup is nearly finished with the rocket’s development, which began in earnest four years ago after the European Space Agency approved the rocket at its 2014 ministerial conference.

ArianeGroup said it added 1,500 people since 2015 to support Ariane 6 development. The company’s current headcount is 9,000. Planned reductions will reduce ArianeGroup’s workforce by roughly a quarter.

Ariane 6 comes in medium- and heavy-lift versions, depending on the number of strap-on boosters included, and is intended to reduce launch prices by 40 percent compared to the Ariane 5.

The combination of increased competition, mainly from SpaceX, and the decline in satellite operators ordering new spacecraft has weighed on ArianeGroup as it prepares to operate the new rocket.

ArianeGroup has also blamed the absence of a commitment by European government agencies to use the Ariane 6 as a source of added difficulty in forecasting demand for the launcher.

Last month, ministers from France, Germany, Spain, Italy and Switzerland meeting in Madrid to plan the 2019 ESA Ministerial Conference signed a joint statement recognizing the importance of consolidating their government space missions so that Europe retains its ability to launch satellites into space without relying on outside nations.

ESA Director General Jan Woerner described the Oct. 25 joint statement as a “first step” in pooling government missions across Europe to provide a minimum, multi-year order for the Ariane 6 and Vega C rockets.

In a separate resolution adopted Oct. 25 in Madrid, ESA said it “encourages the prompt conclusion of launch service contracts with Arianespace for the European institutional missions planned to be launched in the period 2020–2023.”

“The objective is, of course, to aggregate the full institutional demand on European launch services, and in this sense this was a kick off,” ESA’s director of transportation, Daniel Neuenschwander, said after last month’s preparatory meeting for the 2019 ESA ministerial, to be held next November in Spain. ESA holds a ministerial every three years to decide what programs to fund and at what levels.

ArianeGroup and Arianespace want Europe to commit to buying five Ariane 6 and two or three Vega C launches per year for government missions. Combined with Arianespace’s projected commercial orders, the commitment would support an annual launch rate of around 11 Ariane 6s and four to five Vega Cs.