Jobs threat as Thales looks to save £1.2bn

French defence giant Thales, which employs more than 8000 people in the UK, today announced a major shake-up aimed at saving 1.3 billion (£1.2 billion) a year within the next five years.

Thales, which took over Racal in 2000 and has bought parts of Ferranti, Thorn, Marconi and Shorts, said it was too early to say how many jobs were under threat.

The group has 40 sites in the UK. Several of them are in and around London, where it is a major supplier of signalling equipment to the Tube.

Luc Vigneron, who was installed as Thales chief executive earlier this year by its biggest shareholder Dassault, ordered a major management and operational shake-up, which sees at least two top executives heading for the door.

He also admitted that the group had suffered problems on a number of high-profile defence and security projects and that it was being hit by lower government spending.

Vigneron said: "We resolutely intend to implement actions for the transformation of Thales, which are aimed at a better control of our bids and programmes, improved productivity and a simpler organisation."

Thales' shares jumped by more than 7% on the Paris bourse.