Israel Matzav

It starts: Boeing announces huge layoffs in defense division

That sure didn't take long. In a 'cost-cutting' measure, Boeing announced that it will lay off 30% of its management employees and close facilities in California. What's unstated is that the move is undoubtedly motivated by anticipation that the Obama administration will further cut defense spending. According to Wikipedia, Boeing has 65,014 employees in its defense divisions and 22,650 employees in California. So 22,000 layoffs (Hat Tip: Memeorandum)?

Boeing, the Pentagon's second-largest supplier, said the changes were the latest step in an affordability drive that has already reduced the company's costs by $2.2 billion since 2010, according to the memo.

The measures come as U.S. weapons makers are under pressure to cut costs and preserve profit margins amid dwindling defense spending in the U.S.

In a message to employees, Dennis Muilenburg, chief executive of Boeing Defense, Space & Security, said the company aimed to cut costs by an additional $1.6 billion from 2013 through 2015.

"We are raising the bar higher because our market challenges and opportunities require it, and our customers' needs demand it," Muilenburg said.

He said the total savings would reach $4 billion, making the company healthier and better able to deal with a tougher marketplace.

He said Boeing would cut the number of executive jobs an additional 10 percent by the end of 2012, bringing overall cuts in its executive team to 30 percent for the past two years, a move that would result in a 10 percent cut in management costs.

Boeing said the changes were not a response to the threat of additional, across-the-board U.S. budget cuts due to take effect on Jan. 2, or the outcome of U.S. elections, but represented another step in its continuing drive to "be more competitive while investing in technologies and people."

Right....

Anyone want to make aliya?

Labels: Boeing, defense spending

posted by Carl in Jerusalem @ 2:38 PM