By Utkarsh Shetti and Mike Stone
(Reuters) – Lockheed Martin will cut 1% of its jobs over the course of the year in a bid to cut costs and streamline operations, a company spokesperson said on Friday.
The reductions will impact positions across all of its business and enterprise operations, the spokesperson said in a statement to Reuters, adding that the cost-cutting actions will include hiring freezes and voluntary separations.
The Maryland-based defense contractor employs 122,000 people worldwide, according to its website. The cost reductions will aid the company in transforming its operations digitally.
“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 said in the company’s post-earnings conference call on Tuesday.
1LMX is Lockheed’s name for its transformation program.
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Lockheed on Tuesday forecast its 2024 profit below Wall Street expectations, citing supply chain disruptions in its largest aeronautics segment which makes F-35 jets.
U.S. defense firms are seeing a notable increase in orders amid escalating tensions between China and the Philippines, the ongoing conflict between Russia and Ukraine and in the Middle East. However, pandemic-related disruptions in labor and supply chains are weighing on the sector.
The cuts come as some companies in a variety of industries are implementing layoffs to reduce costs with tech companies topping the list.
(Reporting by Utkarsh Shetti in Bengaluru and Mike Stone in Washington; Editing by Cynthia Osterman)