U.S. Defense Contractors Prepare to Disclose Mass Job Cut
U.S. defense contractors including Lockheed Martin Corp., Boeing Co. and Northrop Grumman Corp. may be cutting thousands of jobs at the end of the year, should defense cuts of more than $50 billion take effect – along with other reductions across federal agencies.
“It is quite possible that we will need to notify employees in the September and October time frame that they may or may not have a job in January, depending upon whether sequestration does or doesn’t take effect,” Robert Stevens, chairman of Lockheed Martin, the Pentagon’s biggest supplier with operations in California, Georgia and Texas, said last week, reported Wall Street Journal.
Defense Contractor officials said that they are required to notify employees of potential layoffs 60 to 90 days ahead of time, in accordance with state and federal plant-closing laws.
The Worker Adjustment and Retraining and Notification Act, a federal law also known as the WARN act, requires companies to notify employees in advance of mass layoffs and plant closings.
The across-the-board cuts would also hit suppliers, which may have to be notified in advance that they may not have subcontracts early next year, said Lockheed’s Mr. Stevens.
As part of last year’s Budget Control Act, the defense industry is in the midst of planning for an initial round of cuts that amount to $487 billion over the next ten years.
The failure of a special congressional panel to hash out a deficit-reduction deal triggers a provision in the law that calls for the defense budget to be cut by more than $50 billion a year, over 10 years.
If Congress does not change the law, those cuts will take effect at the beginning of January.