Global military and aerospace giant Lockheed Martin Corp. (NYSE:LMT) announced Thursday it will cut about 4,000 positions as it consolidates facilities and tries to increase operational efficiency to reduce costs amid ongoing declining U.S. government spending.
The Bethesda, Md., company said it anticipated sales in 2013 would decline due to defense cuts by Western governments and says its sales will likely decline again in 2014.
By mid-2015, Lockheed plans to have closed operations in Newtown, Pa.; Akron, Ohio; Goodyear, Ariz.; Horizon City, Texas; and four buildings on its Sunnyvale, Calif., campus. These closures will eliminate 2,000 positions, with programs and some employees moving to other facilities. Another 2,000 positions will be cut from the corporation’s information systems and global solutions, mission system and training, and space systems business areas by the end of 2014.
"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," CEO Marillyn Hewson said in a press release.
Since 2008, Lockheed has reduced overhead costs, cut capital expenses, removed 1.5 million square feet of facility space, and reduced its workforce from 146,000 employees to 116,000. The planned facility closures would further reduce Lockheed’s facility space by nearly 2.5 million square feet.
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Lockheed's lead role in core Pentagon programs such as the F-35 fighter jet has given the corporation an edge against competitors and a bit of a cushion to face military budget cuts.
In October, Lockheed raised its full-year earnings guidance after beating expectations for third-quarter profit, though only one of its five operating units delivered higher operating earnings as sales fell across most of its businesses. Lockheed’s shares have risen 49 percent so far this year, the Wall Street Journal reported.