A Boeing CH-46 Sea Knight flies near the Verrazano-Narrows Bridge during Fleet Week in New York
A Boeing CH-46 Sea Knight flies near the Verrazano-Narrows Bridge while taking part in a Marine Corps helicopter raid demonstration during Fleet Week in New York May 21, 2009 file photo. REUTERS

The Boeing Company (NYSE: BA), the second-largest U.S. defense contractor by revenue after Lockheed Martin Corporation (NYSE: LMT), plans to slash executive jobs and consolidate several business units as part of an effort to cut $1.6 billion in costs at its defense division by 2015, in response to reduced defense spending, according to media reports.

The Chicago-based Boeing said the changes were the latest step in an existing plan that has already reduced the company's costs by $2.2 billion since 2010, according to an internal memo obtained by Reuters and the Wall Street Journal.

Boeing and other defense contractors are faced with the potential for severe, automatic military spending cuts in January unless Congress agrees to an alternative for cutting the deficit.

If the planned cuts take place, about $500 billion will be cut from defense spending over the next 10 years. To put this into perspective, Boeing gets about half of its revenue from the defense business.

Boeing has shed thousands of defense-related jobs over the past two years, and plans to reduce the number of defense executives by an additional 10 percent by the end of 2012, according to the Wall Street Journal. Spokesman Todd Blecher told the Associated Press that much of the job cuts have already taken place.

"We are raising the bar higher because our market challenges and opportunities require it, and our customers' needs demand it," said a memo from Dennis Muilenberg, chief executive of Boeing's Defense, Space & Security unit, reviewed by Reuters.

Boeing earned $1 billion, or $1.35 a share, in profit during the third quarter. That was 6 percent less than the $1.1 billion, or $1.46 a share, that Boeing reported a year earlier. Revenue increased 13 percent to $20 billion.

Shares of the Boeing Company (NYSE: BA) closed down 2.05 percent, or $1.47, to $70.11 apiece in Wednesday’s session.