Lockheed Martin Downsizing, To Cut 4,000 Positions

(RTTNews) - Defense contractor Lockheed Martin Corp. (LMT) says reduced government spending has forced the company to cut its workforce by 4,000 positions and close a number of U.S. production facilities.

"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," President and CEO Marillyn Hewson said in a statement.

The actions will help improve the company's operating efficiency and the affordability of its products and services.

The company noted that the elimination of 4,000 positions will include the cutting of 2,000 positions due to facility closures and another 2,000 positions due to ongoing operational efficiency initiatives.

Meanwhile, the company said the affected employees would receive job placement assistance and severance benefits to assist their transition.

As part of the improvement of operational efficiency, positions will be cut in the company's information systems & global solutions (IS&GS), mission system and training (MST), as well as space systems business areas by the end of 2014.

As part of its closure and consolidation for facilities, the company said it will shutter four of its facilities in Newtown, Pennsylvania; Akron, Ohio; Goodyear, Arizona; and Horizon City, Texas; as well as four buildings on its Sunnyvale, California campus by mid-2015.

Additionally, the company will create operational efficiencies and reduce costs by transitioning all program work and some employees to some of its other facilities. The company said space Systems and IS&GS would transition work to its Denver, Colorado-based and Valley Forge, Pennsylvania-based facilities.

Meanwhile, the company is expecting to finalize plans in early 2014 to transition the MST work to facilities in Owego, New York and Orlando, Florida.

Lockheed Martin noted that the facility closures would further reduce its operational footprint by about 2.5 million square feet of facility space and lower overhead costs. The company has already reduced overhead costs, cut capital expenses, trimmed 1.5 million square feet of facility space and slashed workforce to 116,000 from 146,000 since 2008.

In Thursday's regular trading session, LMT is currently trading at $137.77, up $0.51 or 0.37% on a volume of 0.16 million shares. In the past 52-week period, the stock has been trading in a range of $85.88 to $138.15.