Northrop Grumman blames budget cuts for loss of 600 jobs

Defense contractor Northrop Grumman says that budget pressures at the Pentagon are behind a reduction of nearly 600 aerospace workers.

The Southern California-based company said in a statement it is accepting the voluntary buyouts of 590 workers, mostly based in its California facilities.

The company cited the “uncertainties” in the defense budget — a nod to the pending $500 billion in cuts over the next decade through sequestration — as well as a decline in Pentagon spending that’s already on the books.

“Because of defense budget uncertainties and pressures on current and projected business, we must adjust our budgets by the end of this year to be prepared to meet the challenges of what shapes up as a demanding 2013," Northrop spokesman Thomas Henson said in a statement. "This is a necessary step to address the affordability that will allow us to effectively compete in a very cost-conscious marketplace.”

Henson also noted that the company has about 250 job openings across the sector.


Defense contractors have warned that sequestration, which takes effect Jan. 2 and would cut $55 billion from defense in the 2013 budget, will lead to major job losses in the defense industry.

The Aerospace Industries Association, an industry trade group, has touted industry surveys that say 1 million jobs could be at risk under sequestration.

Northrop CEO Wes Bush told Sen. John McCainJohn Sidney McCainMeghan McCain on Pelosi, McCarthy fight: 'I think they're all bad' Democrats seek to counter GOP attacks on gas prices Biden nominates Jeff Flake as ambassador to Turkey MORE (R-Ariz.) in a letter that the company could not answer questions about the scope of the impact of sequestration due to a lack of guidance.

Northrop's was among the most cryptic of 13 defense CEO letters released last week by McCain after the senator requested information on how sequestration would affect the companies. 

“There are many variables in how the law could be implemented that will determine the impacts,” Bush wrote. “Given the seriousness of these implications, we believe it would not be appropriate for us to speculate on the specifics of the impacts prior to receipt of such guidance.”

The job cuts at Northrop were first reported by the Los Angeles Times.