US aerospace and defence contractor Raytheon has announced that it is consolidating its businesses from six to four units as it seeks to manage the decline in US governmental spending.
The reorganisation, which will be effective 1 April 2013, will…
US aerospace and defence contractor Raytheon has announced that it is consolidating its businesses from six to four units as it seeks to manage the decline in US governmental spending.
The reorganisation, which will be effective 1 April 2013, will result in the loss of 200 jobs and annualized cost savings of approximately US$85m.
Raytheon’s structure will now comprise a new unit called Intelligence, Information and Services, resulting from the combination of the Intelligence and Information Systems and Raytheon Technical Services businesses.
Its existing businesses, Raytheon Space and Airborne Systems, Integrated Defense Systems and Missile Systems will each be expanded by the realignment of the former Network Centric Systems business operations.
In addition, Raytheon has appointed Thomas Kennedy to the new position of executive vice president, chief operating officer. Kennedy previously served as president of Raytheon’s Integrated Defense Systems.
The enlarged Space and Airborne Systems unit will continue to be led by Richard Yuse and be based in El Segundo, California. The expanded business, which had 2012 annual external sales of approximately US$6bn, will now include Integrated Communication Systems and Advanced Programs.
Commenting on the restructure, William Swanson, Raytheon’s chairman and CEO, said: “As we continue to operate in an increasingly competitive budget environment, our ability to enhance our operations, expand our global reach, and coordinate our development opportunities is critical to our success.”
Raytheon derives the vast majority of its revenues from US government, and in particular the Department of Defence, and the continued spending cuts over the past couple of years has eaten into the group’s revenues. Sales for FY 2012 were down 1.5% year-on-year and the company foresees a further revenue decline of more than 3% in 2013 as the budget sequestration bites.
Raytheon stated that this in-house consolidation is not expected to have any impact on the company’s 2013 financial guidance.
