Four military bases in Britain itself are to close completely and three to be partly shut down, The Guardian reported. Hammond said many of the targeted facilities are older and "no longer fit for purpose."
The army would be organized into seven regional centers.
"Of course we are very sensitive to the fact that many of our military units have very close connections to the communities in which they have been embedded for a long time, and there will be significant regret for the loss of those connections," Hammond said.
British troops have been in Germany continuously since they crossed the border in 1945 during the Allied invasion. Under Hammond's timetable, more than half the soldiers now stationed there would be withdrawn by 2016 with the remaining 4,500 coming home by the end of the decade.
In his speech to Parliament, Hammond repeated his warning that the military cannot stand more major budget cuts without a loss of its capabilities.
The reorganization has its own price tag. Hammond said about 1 billion pounds will be spent on new military installations in Britain with more than 30,000 soldiers needing new housing. About 17,000 civilian employees and military family members now in Germany will be repatriated as well.