Raytheon To Cut 14,000 Jobs
LEXINGTON, Mass. (AP) _ In further fallout for the turbulent American defense industry, officials at Raytheon Co. said Wednesday they will cut 14,000 jobs over the next two years to consolidate several recently purchased companies.
The cuts announced Wednesday come in the defense contractor’s Raytheon Systems Company and amount to 16 percent of that division’s 87,000 employees worldwide. Overall, the company has 115,000 workers in the United States and 28 countries.
Company officials said facilities would be shut down in Lewisville, Texas; Mukilteo, Wash.; Orangeburg, S.C.; and San Jose, Calif. A facility in Waltham, Mass. will be closed as well, but all workers there will keep their jobs and are expected to be transferred to Andover and Tewksbury.
The number of jobs being cut is a sizable revision of company estimates in January that it would slash 8,700 positions in the RSC division and another 1,000 in its Engineers and Constructors division.
The announcement is just the latest in an industry that has seen substantial mergers and layoffs for more than a decade, said Jerry Weltsch, a defense and aerospace analyst at Frost & Sullivan, of Mountain View, Calif.
The industry has been struggling because of fewer contracts due to cuts in the national U.S. Defense Department budget and fiercer competition among contractors that have been consolidating and buying each other out.
``You’ll still see other companies, maybe even Raytheon too, acquiring other small companies, bringing them in, then have to lay off these companies they acquire in order to streamline their management,″ Weltsch said.
Boeing, for example, has said it plans to cut 18,000 to 28,000 jobs by the end of 1999. It currently employs about 238,000 workers in 27 states and around the world, including about 118,000 in its commercial aircraft division.
The cutbacks were announced after the close of trading on the New York Stock Exchange, where Raytheon’s class B shares rose $1.75 Wednesday to $58.
Raytheon is somewhat restricted in its ability to layoff workers in Massachusetts because the company was given a state tax break of $25 million a year in exchange for promising to keep its state work force steady.
There was a loophole in the deal, however, allowing the company to escape the restriction if defense contracts slumped.
Raytheon also warned analysts third-quarter earnings would fall below expectations of 90 cents per share. The company cited downsizing costs at Raytheon Engineers and Constructors and sour business deals in that division.
For 75 years, Raytheon has developed defense technologies and converted them to commercial markets in electronics, aircraft products, appliances, energy and environmental services.
More recently the company has focused on defense and commercial electronics; business aviation and special mission aircraft; and engineering and construction.
Raytheon Systems Company, the part of the company cutting jobs, specializes in defense electronics and integrated information systems.