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Lockheed to lay off 600 workers in mission systems, training

By Andrea Shalal-Esa

WASHINGTON (Reuters) - Lockheed Martin Corp, the largest U.S. defense contractor, on Wednesday became the latest weapons maker in recent months to announce layoffs, saying it would let go of 600 workers in its Mission Systems and Training Division later this month.

Lockheed spokesman Keith Little said the layoffs were not linked to the partial U.S. government shutdown, but reflected the increasingly challenging business environment.

The company said it would provide details by November 6 about which of its 100 locations around the country would be affected. Most of the affected workers would leave their jobs by late November.

"This action is necessary to address continuing challenges in our business environment, including continued uncertain program funding, delays in contract awards and an extremely competitive market," Little said in a statement.

Lockheed has already cut its workforce by over 30,000 employees since 2008 and consolidated facilities as it braced for tighter military budgets. A company spokeswoman said the workforce now totaled 116,000.

Lockheed is one of many defense contractors laying off workers and consolidating facilities as the Pentagon braces for over $1 billion in spending cuts over the next decade. when?

This week, Britain's BAE Systems Plc said it would close its Sealy, Texas plant where it builds ground combat vehicles, resulting in over 300 expected job losses.

Dan Stohr, spokesman for the Aerospace Industries Association, the industry's biggest lobbying group, said the layoffs and plant closures were not surprising, since companies were trying to position themselves to weather the downturn.

"Our greatest worry is that important skills and capabilities will be lost as workers transition to other industries as a result of these layoffs," Stohr said.

"We urge Congress and President Obama to work together to put aside sequestration, address the real drivers of our debt and deficit issues, and avoid slashing the very innovation and investments we need to grow in the future."

Last week, Lockheed scaled back by 20 percent its plans to furlough 3,000 employees as a result of the partial government shutdown, after Defense Secretary Chuck Hagel recalled most civilian defense employees.

Industry executives say ongoing uncertainty about future funding levels and a continuing impasse over mandatory cuts in defense spending are slowing government orders, which is beginning to reduce revenues and earnings across the sector.

AIA says the downturn is hitting small and medium-sized business particularly hard since many of them lack the diverse portfolios of larger firms like Lockheed.

In June the group released a survey which showed that 88 percent of small and medium sized defense companies expected a downturn in orders and resulting layoffs.

(Reporting by Andrea Shalal-Esa; Editing by Carol Bishopric and Leslie Adler)

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