Defense contractor Lockheed Martin plans to cut 1% of its global workforce as part of a cost-reduction strategy. The company aims to streamline operations and decrease costs by reducing its workforce by the end of 2024. The job cuts will affect all business and enterprise operations, and the company will also implement hiring freezes and voluntary separations.
Lockheed Martin, headquartered in Maryland, currently employs 122,000 people worldwide. The company believes that these cost reductions will support the digital transformation of its operations. Over 1,200 employees will be impacted by the job cuts.
The announcement comes after Lockheed Martin’s 2024 profit forecast fell short of Wall Street expectations. The company cited supply chain disruptions in its largest aeronautics segment, responsible for manufacturing F-35 jets, as the reason for the shortfall. Despite an increase in orders due to escalating global tensions, U.S. defense firms, including Lockheed, are facing challenges due to pandemic-related disruptions in labor and supply chains.
This announcement also follows Lockheed Martin’s recent disclosure of potential delays in the delivery of an upgraded version of its F-35 fighter jets due to software issues. These delays caused a significant drop in the company’s stock. However, Lockheed Martin reported a marginally better-than-expected Q4 earnings report, with the company expecting “topline growth” despite slightly lower net earnings.
The job cuts and cost-cutting measures can be seen as a response to these recent challenges and a strategic move to ensure future growth for Lockheed Martin. The company aims to optimize its supply chain, improve factory productivity, and drive efficiencies to reduce costs.
Lockheed Martin’s CFO, Jay Malave, stated during the company’s post-earnings conference call that they are focused on driving cost reduction in their direct cost base. The company believes that these cost reductions, combined with supply chain optimization and improved productivity, will help overcome the challenges they are currently facing.
In conclusion, Lockheed Martin’s plans to cut 1% of its global workforce reflect its efforts to streamline operations and decrease costs. The job cuts, hiring freezes, and voluntary separations are part of the company’s strategy to navigate supply chain disruptions and ensure future growth. By driving cost reduction and implementing efficiency measures, Lockheed Martin aims to overcome the challenges posed by the pandemic and continue its digital transformation.
