FARNBOROUGH, England, Sept. 27, 2011 — Defense contractor BAE Systems announced Tuesday it will cut 2942 jobs in an attempt to maintain its competitiveness as customers face huge pressures on how they spend their defense budgets.

Of the cuts, more than half, 1742, will take place at two of its locations: Brough (899) and Warton and Preston (843). The third largest cut, 565, will happen in Samlesbury, followed by 132 in Yeovil and 81 in Frimley. The affected jobs are associated with its Military Air & Information and Shared Services businesses and its head office.

The cuts represent about 7 percent of the domestic work force of the UK's largest employer. The company employs about 98,000 worldwide and more than 38,000 in the UK.

"Our customers are facing huge pressures on their defense budgets, and affordability has become an increasing priority," said Ian King, chief executive of BAE Systems. "Our business needs to rise to this challenge to maintain its competitiveness and ensure its long-term future."

King added that the four nations partnering in the Eurofighter Typhoon program have agreed to slow production rates to help ease their budget pressures. The job losses at Brough, Preston and Warton, and Samlesbury are associated with the changes in the Typhoon program and F-35 production, the company said. BAE is also considering ending manufacturing in Brough.

A number of other job cuts are in response to reductions in Harrier and Tornado work, the company said.

"Pressure on the US defense budget and top-level program changes mean the anticipated increase in F-35 production rates will be slower than originally planned, again impacting on our expected workload," King said.

BAE Systems is working on the F-35 program for Lockheed Martin. The first production-standard F-35 has been delivered to the US Air Force, and BAE has also delivered more than 50 rear fuselage assemblies to Lockheed Martin. Full funding for 32 aircraft has been received.

UK Business Secretary Vince Cable said a group he formed last year will help the skilled workers find new jobs in UK manufacturing. "The group will ensure that the shortage of engineers in UK manufacturing is not exacerbated by the loss of talented people from companies like BAE Systems," he said.

"This transformation process is not going to be easy. We understand that this is a time of uncertainty for our employees, and we are committed to working with them and their representatives to explore ways of mitigating the potential job losses," King said.

For more information, visit: www.baesystems.com