A job with a defense contractor was once a prized — and stable — position in the Washington region.
But top Pentagon officials have called on defense contractors to trim their costs and have made cuts to some large programs. The push for efficiency has rippled through the defense industry, prompting some firms to cut back their workforce and generating concerns that some of the industry’s most skilled employees and prospects will reconsider their career options.
“The apprehension in the sector is generalized right now — nobody really feels like they’re safe,” said Loren Thompson, a defense industry consultant at the Lexington Institute. “As a consequence, people across the industry are examining their options and considering what they might do instead of their current jobs.”
Bethesda-based Lockheed Martin last week announced “voluntary layoffs,” offering severance packages to 6,500 employees, about 2,000 of whom are based in the Washington region. That followed more cuts last month when the defense giant announced it would lay off about 1,500 employees in its aeronautics business and 1,200 in its space systems business. This year, Falls Church-based General Dynamics said it would lay off 112 employees, or about one-third of its Woodbridge workforce, after a Marine Corps vehicle program was canceled.
Last year, Raytheon consolidated four District-area offices into a new Dulles campus to save on real estate costs.
While the Pentagon’s cutbacks have been limited to a few programs, industry officials are concerned that defense spending is likely to be reined in further as congressional leaders debate how to lower the budget deficit.
“It’s clear that the relatively benign environment that defense companies have faced over the past decade is ending,” said Philip Finnegan, director of corporate analysis at Teal Group. “The deficit talks are just one element of an increasingly challenging environment.”
At the same time that some firms are cutting back, the industry overall continues to struggle to attract enough highly skilled workers with security clearances. Engineers, scientists and software designers exiting college may choose to avoid a career in the defense industry as the sector continues to cut back, said Marion C. Blakey, president and chief executive of the Aerospace Industries Association, an industry group.
“If you begin to see young talent with technical degrees going elsewhere, it’s a genuine problem for our country from a national security standpoint and an economic standpoint,” she said.
Catherine Barrett, 36, said she became worried in 2007 when she was a military and federal affairs manager at Maryland’s economic development office. She jumped into real estate consulting, before landing a job last year as a health care consultant.
The “writing was already on the wall,” Barrett said. “I wanted to try to get ahead of the game and look at other markets.”
Some defense contractors are beefing up their lobbying efforts to head off more cuts.
The Arlington-based U.S. operations of BAE Systems named Erin Moseley, former president of District consulting firm Principled Strategic, to head its government affairs shop. She will focus on making connections with military officials early in the budgeting process, said Linda Hudson, president and chief executive of BAE’s U.S. unit.
“In this uncertain environment where we are fiscally constrained, this early customer involvement, early customer relationship is crucial,” Hudson said. “If you want to influence or be responsive to what the customer needs, you need to . . . get involved very early with the appropriate people in the Pentagon.”