Defense contractor Lockheed Martin LMT has revealed plans to eliminate 1% of its global workforce as part of a cost-reduction strategy.
What Happened: Lockheed Martin intends to reduce its workforce by 1% over the course of 2024 in a bid to streamline operations and decrease costs, CNBC reported.
The job cuts will span across all business and enterprise operations. The company’s cost-cutting initiatives will also encompass hiring freezes and voluntary separations, as per a company spokesperson.
Lockheed Martin, headquartered in Maryland, currently has a global workforce of 122,000. The company is confident that these cost reductions will facilitate the digital transformation of its operations. The job cuts will impact over 1,200 employees.
“We’re driving cost reduction in our direct cost base through supply chain optimization, factory productivity and also on 1LMX-driven efficiencies,” Lockheed Martin CFO Jay Malave stated during the company’s post-earnings conference call on Tuesday.
The announcement follows Lockheed’s 2024 profit forecast, which fell short of Wall Street expectations due to supply chain disruptions in its largest aeronautics segment, responsible for manufacturing F-35 jets.
Despite a rise in orders due to escalating global tensions, U.S. defense firms, including Lockheed, are struggling with pandemic-related disruptions in labor and supply chains.
Why It Matters: This announcement comes on the heels of 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, causing a significant drop in the company’s stock.
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 could be seen as a response to these recent challenges and a strategic move to ensure future growth.
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Photo courtesy: Lockheed Martin
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