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Boeing Announces Big Layoffs in Defense Division

Boeing Announces Big Layoffs in Defense Division
Published: Wednesday, 7 Nov 2012 | 2:59 PM ET
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By: Reuters

Boeing announced a major restructuring of its defense division on Wednesday that will cut 30 percent of management jobs from 2010 levels, close facilities in California and consolidate several business units to cut costs.

The company [BA  70.11    -1.47  (-2.05%)   ] told employees about the changes on Wednesday, in a memo obtained by Reuters and confirmed by Boeing.

Boeing, the Pentagon’s second-largest supplier, said the changes were the latest step in an affordability drive that has already reduced the company’s costs by $2.2 billion since 2010, according to the memo.

The measures come as U.S. weapons makers are under pressure to cut costs and preserve profit margins amid dwindling defense spending in the U.S.

In a message to employees, Dennis Muilenburg, chief executive of Boeing Defense, Space & Security, said the company aimed to cut costs by an additional $1.6 billion from 2013 through 2015.

“We are raising the bar higher because our market challenges and opportunities require it, and our customers’ needs demand it,” Muilenburg said.

He said the total savings would reach $4 billion, making the company healthier and better able to deal with a tougher marketplace.

https://www.cnbc.com/id/49729998

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