Northrop Plans to Cut 3,000 Jobs Because of Stealth Bomber Cutback

Northrop Corp. said today that it plans to cut 3,000 jobs, most of them in Southern California, because of proposed federal budget cuts affecting its B-2 Stealth bomber program.

The layoffs amount to about 7% of the company’s work force.

The Defense Department, seeking to trim spending, recently proposed sharp cutbacks in the number of the radar-evading bombers it would purchase from Northrop, a major military contractor based in Los Angeles.

“Necessary cost reductions and the change in the national defense plan will produce a total net loss of approximately 3,000 jobs at Northrop by the end of 1990,” Chief Executive Officer Kent Kresa told shareholders at the company’s annual meeting.

The company currently employs about 41,000, he said.

Defense Secretary Dick Cheney has proposed cutting purchases of the B-2 to 75 aircraft from 132, Kresa said in explaining the job cuts.

He said the company also plans to continue a program to sell non-productive assets.

Late last year, Northrop sold its corporate headquarters building in Los Angeles for a net gain of $90 million.

Kresa said asset sales, the job reductions and other cost-cutting measures will increase the company’s profitability and eliminate its current debt load of about $1 billion by the mid-1990s.

The B-2 program, designed to eventually replace the nation’s fleet of 100 B-1 bombers, is a major program for Northrop, accounting for about half of its business.