Hughes Employees Brace for Deep Cuts in Jobs : Aerospace: Many expect bad news as the company prepares to announce plans for a restructuring.
Hughes Aircraft was preparing to disclose a new corporate restructuring as early as today, generating anxiety around the Los Angeles-based aerospace company over potentially deep job cuts, employees said Monday.
Hughes Chairman C. Michael Armstrong presented a restructuring plan Monday to the board of Hughes parent General Motors, but the company made no immediate announcement about layoffs or other elements of a restructuring plan.
Several management officials, however, said their supervisors had scheduled staff meetings for today and that preparations had been made for a satellite broadcast to Hughes employees today from Hughes headquarters.
While employees braced for the worst, at least one securities analyst noted that the company has already gone through several years of cost cutting. Hughes is down to 60,300 jobs from its peak of 82,100 in mid-1986.
Nonetheless, company managers and executives said Monday that it appeared that the company is headed toward a painful reduction of overhead as it continues a sweeping reorganization that began last summer when various divisions were consolidated.
“Armstrong has said that we have too many groups, too many divisions and too much duplication,” one executive said. “Division managers and assistant division managers are going to be hurt. There is a lot of turmoil, and a number of senior executives look like they are headed out.”
The goal set for Hughes by GM is to re-establish itself as a high-technology growth company. After heady growth in the early 1980s in defense electronics, the company is trying to do the same in commercial markets. But it is requiring an adjustment of its traditionally high-cost way of doing business.
Last year, the company began consolidating its radar, electro-optical and ground systems groups into a single aerospace and defense group. That is expected to result in hundreds of administrative jobs being eliminated, the source said.
At just the electro-optical group, planning documents indicate that as many as 700 jobs could be eliminated by year-end. If the cuts are similar throughout the company, another 3,000 jobs might be lost, the securities analyst estimated. The analyst asked not to be named.
In addition, the company is likely to pare 6,000 jobs this year and next as Hughes consolidates its missile business with that of General Dynamics, which Hughes is acquiring for $450 million in special stock.
The executive said the company is aiming to cut costs by as much as 30%.
While that would not translate into an equal proportion of job cutbacks, it points toward severe austerity.
Another manager said that rumors were particularly grim Monday and that employees were braced for a “real bloodletting.”
Hughes has already eliminated 3,000 jobs since January.
