WASHINGTON, Jan. 27 (States News Service) – Facing a trend of falling profits and stock, defense and aeronautics giant Lockheed Martin will lay off 2,800 employees in management positions in an effort to cut costs and consolidate oversight of its space and aeronautics operations, the company announced Thursday.
The layoffs will be made in the company’s aeronautics sites in Marietta, Georgia, Sunnyvale, California, and Fort Worth, Texas, along with space business locations in Denver, Colorado and at the Georgia and California sites.
The company said it will also shift oversight of its space business operations to Denver, Colorado and is consolidating its aeronautics operations at Fort Worth, Texas.
In addition to cutting costs, the restructuring would speed decision-making and focus resources on carrying out programs, the company said.
"These actions are the direct result of our continuing drive to improve our customer focus, flatten our management structure and enhance our financial performance," said Vance Coffman, chairman and CEO.
Overall, Lockheed said it expects the restructuring to bring $200 million in annual savings. Of this, $30 to $40 million would come from layoffs in the space business area, and the rest of the savings would come from the aeronautics division.
The company said it would pay severance to those laid off. Although the firm did not specify the costs involved, it said the expenses would be offset by savings.
In the space operations, 300 to 400 jobs will be cut in staff support areas such as finance, human resources, legal and communications. 60 percent of the cuts will be made at the company’s Sunnyvale, California site, 30 percent in Denver and 10 percent in Michoud.
From now on, the company’s space business operations in Sunnyvale, Denver and New Orleans, Louisiana will report to the Denver site.
Citing an effort to cut costs and reduce duplication of jobs, the aeronautics division will lay off 2,500 administrative workers from sites in Georgia, California and Texas over the next 18 months. These numbers add to 2,000 workers from the Marietta, Georgia site being fired since September.
The Texas site will focus on airplane assembly, and will oversee four other assembly plants in West Virginia, Pennsylvania and elsewhere. Corporate executive vice president, Dain Hancock, will head the operation.
John Logsdon, director of the Space Policy Institute at George Washington University, said the layoffs were not surprising, given Lockheed’s low earnings and missed federal contracts.
"The best way to see this is part of a process that goes back to the merger of Lockheed and Martin six years ago; two very large and different organizations," he said, adding, "This is not a panic move."
Last year the company announced that profits for 2,000 would be lower than expected.
"You knew something had to be done to not upset the shareholders," said Eric Stallmer, president of the Space Transportation Association. "So long as it doesn't affect quality control."
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