By Roxana Tiron - 09/08/10 06:32 PM EDT
More than 600 Lockheed Martin executives will take buyouts as part of a company-wide move to shed about 10,000 jobs nationally, the defense giant announced Wednesday.
The executives have
applied for the early-exit program. They represent about 25 percent of the
company’s executive ranks. Those leaving the company early will receive
financial incentives to do so.
The senior executive buyout program will enable Lockheed to “achieve significant cost savings and a leaner management structure at a time when our customers have an urgent need for more affordable solutions to the global security challenges they face,” Lockheed Martin Chairman and CEO Bob Stevens said in a statement. “We’re grateful to the executives who will be leaving, because we built this corporation on their leadership and dedicated service.”
The company’s announcement comes as the Pentagon tightens its belt and looks for ways to keep the cost of defense programs in check. Lockheed Martin is the contractor for the Pentagon’s largest program: the F-35 Joint Strike Fighter.
To stay in line with its biggest customer — the Pentagon — Lockheed Martin earlier this year announced other affordability measures, including a business reorganization, the divestiture of two business units and a significant reduction in international trade-show participation and advertising presence.
Lockheed Martin is not the only major defense company to announce reduction in its executive ranks. Another major contractor, Boeing, announced Tuesday that it would consolidate its military aircraft business, reducing its six divisions to four starting Oct. 1.
About 10 percent of the executives in the military aircraft unit will lose their jobs, and additional reductions across all levels of the organization are anticipated in coming months, according to a Boeing statement.