Lockheed Martin [LMT] on Wednesday said it plans to reduce the workforce of its IT services segment by 500 employees to improve the competitiveness of the business, which the company is considering divesting.
The company said the pending layoffs, which will be complete by mid-November, are being done due to shifting government priorities, changing industry dynamics, and to improve the competitiveness of its Information Systems & Global Solutions (IS&GS) segment.
In July, Lockheed Martin, in conjunction with its announcement that it has agreed to acquire Sikorsky Aircraft from United Technologies Corp. [UTX], said it had begun a strategic review of its government IT and technical services businesses, most of which reside in IS&GS.
Lockheed Martin said the pending layoffs, which are both voluntary and involuntary, are separate from the strategic review of the IT business.
“We made these difficult decisions as part of our efforts to remain competitive in an extremely challenging environment where industry dynamics have shifted, customer budgets are constrained and competition has continued to escalate,” Sandra Barbour, executive vice president of IS&GS, said in a statement. “Continuing to reduce our overhead costs, is expected to enable us to be a much leaner and more agile organization which is what is needed to compete effectively.”
IS&GS has 24,000 U.S. employees across multiple locations including the Washington, D.C., region, Colorado, Pennsylvania, and Texas.