Northrop Grumman is moving to cut costs and reorganise in the wake of the failed merger with Lockheed Martin. The aim is to slash annual operating costs by $300 million, partly through a realignment of operating units.

While the company is planning a large number of redundancies, these are expected to be more than balanced by an increase in employee numbers in the electronics side of the business.

An additional 2,100 jobs are planned to be cut largely from the company's commercial aircraft unit by the end of 2000 and come on top of cuts previously disclosed, which affected 8,400 employees - about half of which are related to the winding down of B-2 stealth bomber production.

On a more positive note, the firm's information technology and electronics business workforce is expected to expand by around 2,500 people by the end of 2000. As a result, company-wide employment is scheduled to total 46,000 by the start of 2001 - down by 8,000 from the current level.

Northrop Grumman will take a $60 million charge this year to cover the costs associated with the workforce reduction. The company says that cutbacks in commercial aircraft aerostructures production, and contract delays, will slow revenue growth. It does not expect to achieve revenues of $12 billion until 2003, a year later than previously projected.

Northrop Grumman has realigned some business units into two new operating sectors. The integrated systems and aerostructures sector, which will be based in Dallas, Texas, consolidates into one unit, with operations in Bethpage, New York, Dallas, El Segundo, California, and Melbourne, Florida.

The electronic sensors and systems sector, to be based in Baltimore, Maryland, combines the radar producing unit with the electronic systems group in Rolling Meadows, Illinois, and the Space-Based Infrared Sensors project in Bethpage.

Source: Flight International