Lockheed Martin Corporation (NYSE:LMT), the largest defense contractor by sales, announced its decision to cut 4,000 jobs in response to the continued reduction of the United States government’s spending.
The defense contractor will close and consolidate some of its facilities in the United States to increase the efficiency of its operations, and to make its products and services more affordable.
Lockheed Martin expected to close operations in several cities
Lockheed Martin Corporation (NYSE:LMT) is expected to closes its operation in Newtown, Pennsylvania; Akron, Ohio; Goodyear, Arizona; and Horizon City, Texas. It will also shut down its four buildings in Sunnyvale, California by mid-2015. According to the company, 2,000 jobs will be cut from these closures.
The additional 2,000 positions that will be reduced will come from its Information Systems & Global Solutions (IS&GS) Mission System and Training (MST), and Space Systems businesses by the end of this year.
Employee to be transferred to other facilities
According to Lockheed Martin Corporation (NYSE:LMT), all program works and some of its employees will be transferred to its other facilities as part of the consolidation to create operational efficiencies and reduce costs.
The operations of the Space Systems and IS&GS will move to its facilities in Denver, Colorado and Valley Forge, Pennsylvania. Lockheed Martin Corporation (NYSE:LMT) is evaluating the potential transfer of the operations of its MST business in its facilities in Owego, New York and Orlando, Florida.
Marillyn Hewson on workforce reduction
In a statement, Marillyn Hewson, chief executive officer of Lockheed Martin Corporation (NYSE:LMT) said, “Reducing our workforce of dedicated employees and closing facilities are among the most difficult decisions we make. In the face of government budget cuts and an increasingly complex global security landscape, these actions are necessary for the future of our business and will position Lockheed Martin to better serve our customers.”
According to the company, its operational footprint will be reduced to 2.5 million square feet of facility and lower its overhead costs further because of the closures. Lockheed Martin Corporation (NYSE:LMT) will provide job placement assistance severance benefits to the employees that will be terminated from their positions.
Since 2008, the company has reduced its workforce from 146,000 to 116,000. Last year, the company reported $47.2 billion net sales.
The stock price of Lockheed Martin Corporation (NYSE:LMT) is down by nearly 1% to $137.01 per share around 11:15 AM in New York on Friday.