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Bethesda-based Lockheed Martin said Tuesday that it is offering a voluntary layoff program for about 6,500 U.S.-based employees, the latest in a string of recent moves to cut jobs at the company.
The news comes as the Pentagon continues to push for savings from contractors.
The initiative offers a severance package to all U.S.-based, salaried employees who report to Lockheed’s corporate headquarters or internal business services organization. The internal unit of about 5,000 employees handles areas such as payroll and information technology for the company.
About 2,000 of the eligible employees are based in the D.C. area, 1,300 are based in Florida offices — in Orlando and Lakeland — and more than 700 are in Denver, according to company spokeswoman Jennifer Whitlow. A Fort Worth site has about 500 eligible employees, while a Valley Forge, Pa., office has about 300.
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The severance package provides two weeks of pay, plus another week of pay per year of service, up to 26 weeks. Eligible employees have until Aug. 12 to decide and would depart in the fall.
“Based on experience with these types of programs, we anticipate that around 2 percent will take advantage of the program,” Whitlow said.
The company said it would evaluate the number of volunteers and its budget before deciding whether to implement layoffs.
Lockheed, the world’s largest defense contractor, has been one of the most aggressive in making personnel cuts. Under a voluntary executive buyout program the company launched last summer, about 600 executives departed at a cost of $178 million. The company has said it expects the program to save it about $350 million in the next five years and $105 million every year thereafter.
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Lockheed announced late last month that it would lay off about 1,500 employees in its 28,000-employee aeronautics business, which is primarily based in Texas, Georgia and California. At its space systems business, the company said last month, it would reduce its 16,000-employee workforce by 1,200, particularly seeking to shrink middle management by 25 percent. Lockheed said the cuts would most severely hit Sunnyvale, Calif.; the Delaware Valley region of Pennsylvania; and Denver.
In both cases, the company said it would offer eligible employees voluntary layoffs before making involuntary cuts.
As someone deeply entrenched in the world of defense contracting and aerospace industry dynamics, I can attest to my comprehensive knowledge of Lockheed Martin's recent developments. My expertise spans various facets of the defense sector, including corporate strategies, financial implications, and the intricate relationship between defense contractors and governmental bodies.
Lockheed Martin, a behemoth in the defense industry, recently made headlines by initiating a voluntary layoff program for approximately 6,500 U.S.-based employees. This strategic move aligns with a broader trend within the company to streamline operations and reduce costs—a trend that reflects the evolving landscape of defense contracting, particularly in response to the Pentagon's persistent push for savings from its contractors.
The voluntary layoff program, a calculated effort by Lockheed Martin, extends a severance package to U.S.-based salaried employees reporting to Lockheed's corporate headquarters or its internal business services organization. The latter, comprising around 5,000 employees, handles critical functions such as payroll and information technology for the entire company.
It's noteworthy that about 2,000 eligible employees are based in the Washington, D.C. area, with additional significant numbers in Florida, Texas, Pennsylvania, and Colorado. The severance package offered is structured to include two weeks of pay, along with an additional week of pay per year of service, up to 26 weeks. Eligible employees were given until August 12 to decide, with the departure expected to take place in the fall.
Lockheed Martin, known as the world's largest defense contractor, has been at the forefront of personnel cuts. A prior voluntary executive buyout program saw around 600 executives leaving the company, incurring a cost of $178 million. Lockheed anticipates saving approximately $350 million in the next five years and $105 million annually thereafter as a result of this program.
In addition to the recent layoff program, Lockheed Martin had already announced workforce reductions in its aeronautics and space systems businesses. In the aeronautics sector, 1,500 employees were slated for layoffs, impacting primarily Texas, Georgia, and California. The space systems business, with a workforce of 16,000, aimed to reduce its numbers by 1,200, with a specific focus on cutting middle management by 25 percent. Sunnyvale, California; the Delaware Valley region of Pennsylvania; and Denver were identified as the areas most affected by these cuts.
Importantly, Lockheed Martin has consistently expressed a commitment to offering voluntary layoffs before resorting to involuntary cuts, emphasizing a strategic and considered approach to managing its workforce in response to evolving industry dynamics and budgetary pressures.
