Aerospace and defence giant Lockheed Martin has revealed a cost cutting plan that will see it reduce its total workforce by approximately 4,000 positions and shut down its Newtown, Pennsylvania, satellite manufacturing facility by mid-2015.
The move is…
Aerospace and defence giant Lockheed Martin has revealed a cost cutting plan that will see it reduce its total workforce by approximately 4,000 positions and shut down its Newtown, Pennsylvania, satellite manufacturing facility by mid-2015.
The move is the result of a strategic review into improving the company’s cost structure and organisation in response to the decline in US government spending.
Lockheed stated that the job losses would be from its Space Systems, Information Systems & Global Solutions (IS&GS) and Mission Systems and Training (MST) business segments. It currently estimates that the special charge for severance costs will be approximately US$115m after tax and that it would record the special charge in its fourth quarter results.
Contemporaneously, Lockheed will consolidate certain facilities in these businesses. Specifically, IS&GS will vacate its leased facility in Goodyear, Arkansas; MST plans to vacate its leased facility in Akron, Ohio; and Space Systems plans to close its owned facility in Newtown as well as certain owned buildings at its Sunnyvale, California facility.
The plant in Newtown will close by early 2015 with most commercial and military satellite work transferring to Lockheed’s Denver, Colorado, facility. This will be a phased process over the next 12 to 18 months and will see the latter’s manufacturing, assembly and test operations improved to cope.
The Newtown site currently employs approximately 1,050 employees, 800 of which are expected to be impacted. Lockheed said that the adjustments to the Denver plant will see it relocate or hire approximately 350 employees.
As for the manufacturer’s Sunnyvale facility, Lockheed stated that it is consolidating its operations there as part of an overall upgrade, which has seen it invest US$200m in the plant over the past five years. Four buildings on the campus are to be closed with the loss of 200 jobs.
In total, the company will remove 500,000 square feet of facility space from Newtown and 600,000 sq ft from Sunnyvale, while there will be 200,000 sq ft of facility modifications in Denver.
