BAE Systems to Cut 1,700 Jobs

Aerospace group BAE Systems is cutting 1,700 jobs, or 1.7% of its work force, due largely to a decline in demand for its regional jets after the terrorist attacks in the United States.

The outlook for smaller, regional aircraft designed for short-haul flights has deteriorated sharply, Chief Executive John Weston said.

BAE said it would continue to build four regional jets already in production but was scrapping a program to make a successor to the current generation of these four-engine aircraft.

The company had already received orders for its new RJX regional jets, and the aircraft was due to come into service in April. Closing down the project will cost BAE $564 million in restructuring and severance costs.

The company said it hoped to make the job cuts on a voluntary basis but could not rule out compulsory layoffs. BAE employs about 100,000 people, 70,000 of them in Britain.