lockheed Martin seeks voluntary layoffs

Thursday , March 06, 2014 - 10:28 AM

Marjorie Censer

WASHINGTON — Facing potentially deep cuts to government spending, Bethesda, Md.-based Lockheed Martin plans to eliminate up to 350 mid-level manager positions through voluntary layoffs over the next few months.

The move comes as defense contractors struggle to maintain growth and are facing automatic reductions to defense spending in March.

Lockheed is offering voluntary layoffs to employees in its Gaithersburg, Md.-based information systems unit, which includes many technology projects that could be particularly vulnerable in a budget squeeze.

Technology projects operate on shorter budget cycles than aircraft manufacturing or shipbuilding, for which funding is typically planned years in advance. As a result, reduced spending affects them sooner.

Falls Church, Va.-based General Dynamics, for instance, said last month it was devaluing its information technology business by $2 billion in response to falling government demand.

“Lockheed is the government’s biggest IT contractor, so of course it’s going to be taking hits,” said Loren Thompson, who consults for defense companies, including Lockheed. “But the whole sector is likely to see a loss of thousands of workers.”

The information technology unit has already begun to weigh on Lockheed. During the fourth quarter of 2012, the unit reported a 20 percent decline in operating profit compared to the same period a year ago. It was the only Lockheed unit to report a decline in full-year operating profit between 2011 and 2012.

The “reduction in force is designed to best position the business to remain competitive and operationally efficient, providing the most affordable solutions to our customers,” the company said in a statement.

Employees working on projects within the company’s transportation solutions, defense and central engineering businesses, among others, will be eligible for the layoffs package, according to a memo issued by Lockheed last week that was first obtained by Dice, a technology job board. According to the memo, employees have until Feb. 28 to volunteer for a layoff package and could leave the company by March 22. Lockheed did not specify in which locations the layoffs would take place.

The company’s 120,000-person workforce includes about 11,000 employees in the Washington metro area.

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