Well known defense contractor Lockheed Martin has to close its doors on account to the decline in U.S. government spending. Over 4,000 jobs in five different states are suffering layoffs. Of the five states, including Newtown, PA; Akron, Ohio; Goodyear, Arizona and Horizon City, Texas have roughly about 2, 000 jobs to be cut and in Sunnyvale, California four buildings are shutting down eradicating another 2,000 more jobs.
According to the CEO Marilyn Hewson, the reduction of a dedicated workforce and closing facilities were among the most difficult decisions the company ever had to make. Ms. Hewson was quoted saying “In the face of government budget cuts and an increasingly complex global security landscape, these actions are necessary for the future of our business.”
This company holds a vast reliance in regards to the U.S. government spending. It speaks in numbers; according to company filings, it’s federal contracts were worth nearly $39 billion in 2012, representing more than 80% of its overall revenue. Because of the federal government shutdown in October, the company had proclaimed that it would temporarily relieve 3,000 workers.
Since then the company has been reporting improved earnings and its shares has increased by nearly 50% so far this year. Shares were slightly higher Thursday on the layoff announcement according to the stock exchanges (LMT, Fortune 500). It makes one think if the company was for the layoff rather than against it.
According to the records since 2008, the company has downgraded around 30,000 positions or about 20% of its global staff downsizing total employment to a mere 116,000.