QinetiQ is planning to reduce costs by 10% and cut jobs and staff benefits.
The former government defence research agency will take the steps in a bid to shake off a “Civil Service mentality” and return to growth.
Leo Quinn, chief executive of QinetiQ, said staff would have to choose if they want to “be part of an organisation in terminal decline or one with a great future”.
The employees are currently entitled to eight weeks pay for every year of service, and up to 160 weeks for those employed before 2001, but Quinn said QinetiQ could not afford to make redundancies on the current terms.
The firm has already spent £75m on staff cuts in the last three years, the Daily Telegraph reported.
QinetiQ, which was created out of the Ministry of Defence in 2001, has proposed cutting the maximum payout to 15 months’ salary or £90,000, whichever is lower, and Prospect union will ballot members next month on the offer.
Quinn urged the staff to accept the deal because any future offer from the firm would be “a lot worse”, the Guardian reported.
He added: “The debt for these payments goes onto the balance sheet. Employees who remain have to shoulder the burden. That is not fair.”
David Luxton, national secretary of Prospect, said: “Our preference is to achieve a negotiated settlement.”
QinetiQ reported a pre-tax loss of £66.1m in the year to the end of March, down from a profit of £114m the previous year, due to restructuring costs.
