Image copyright Getty Images Image caption EADS is changing its name to Airbus, the civil planemaking division

Aerospace and defence giant EADS says it will cut 5,800 jobs as a fall in governments' military spending begins to bite.

The company, which owns Airbus, plans to reorganise its European defence and space businesses.

It says there will be a "substantial consolidation" of sites in Germany, France, Spain and the UK.

In the UK operations will be focused on three sites - Stevenage, Portsmouth and Newport at the cost of around 450 jobs.

It is understood that the programme will be put in place over three years and that the company aims to make most of the cuts through voluntary measures.

Analysis The basic problem is not a lack of profitability - EADS is not making a loss. It's simply that the amount of profit it's making in various bits of the defence business doesn't come anywhere near the kind of profit made at US rivals like Lockheed Martin or Boeing. Also one thing that may be worrying the company is that they don't seem to have any big projects on the horizon - there are no projects for a new fighter planes for example.

Tom Enders, chief executive of EADS, said in a statement: "We need to improve our competitiveness in defence and space - and we need to do it now.

"With our traditional markets down, we urgently need to improve access to international customers, to growth markets."

Closures?

Last year, EADS tried to negotiate a tie-up with UK defence company BAE Systems, but the deal stumbled amid strong political opposition.

EADS warned then that it would have to restructure in the face of defence budget cuts in its main markets.

It is understood that the UK operations, which employ more than 17,000 people, will be affected as part of the consolidation of the Astrium, Cassidian and Airbus Military divisions in a new unit, to be called Airbus Defence and Space.

Image copyright Reuters

Cassidian is the biggest shareholder in the Eurofighter and builds the fuselage and important parts of the combat jet's electronics.

EADS' Paris headquarters will also be closed. The company had already announced that it is changing its name to Airbus, the Toulouse-based commercial aircraft arm that contributes the bulk of group revenues.