Lockheed Martin Sets Voluntary Layoff Plan For 6,500 Employees

Lockheed Martin Corp. (LMT) disclosed plans for a voluntary layoff program for which 6,500 U.S. employees will be eligible at its corporate headquarters and in its enterprise business services segment, a move the aerospace and defense company said was intended to align its corporate staff with the needs of its businesses.

The cuts follow the recent work force reduction of about 3,300 employees in the aeronautics, space systems and other segments earlier this year. Lockheed said it will determine the need for further involuntary cuts after gauging the participation in the most recent plan.

The reduction should help the company improve its profitability and pricing, though the space-systems business faces an uncertain future with the pending closure of major projects and the federal government looking to trim costs. Meanwhile, NASA has designated Lockheed's four-person space capsule, dubbed Orion, as the likely vehicle to take future astronauts beyond Earth's orbit, a decision that could lock in billions of revenue over the next few years.

Under the terms of the offer, volunteers will receive a severance package to leave the company in the fall. The company also said the earlier reduction of 350 executive positions will cut costs by about $350 million over the next five years and $105 million a year after that.

Shares were off 38 cents at $78.02 after hours and have climbed 5.89% over the past 12 months through the close.

 
   -By Lauren Pollock, Dow Jones Newswires; 212-416-2356; [e-mail]