Booz Allen cuts 516 employees

February 5, 2012

McLean-based Booz Allen Hamilton reduced its total head count by about 516 employees in January as part of an effort to reshape its workforce, company officials said last week.

Ralph W. Shrader, chief executive, president and chairman of the contracting giant, said during a call with investors that the company trimmed its workforce by about 2 percent total, which included a larger slice of about 10 percent in its senior and middle management and internal operations ranks.

As of Dec. 31, the company reported 25,825 total employees, which includes about 14,000 based locally.

Shrader said that the company’s overhead costs were not sized to match the shrinking federal market the company faces. Rather, the cuts reflect the company’s “determination to get out in front,” he said. “We believe these measures will better position Booz Allen for continued growth.”

Shrader’s comments came as the company reported strong earnings, posting revenue of $62.9 million (44 cents a share) in the three-month period ended Dec. 31, up nearly 166 percent from $23.6 million (18 cents) in the same period a year earlier. Revenue increased almost 4 percent to $1.44 billion.


Samuel R. Strickland, Booz Allen’s chief financial officer, told investors the company expects to incur a charge of $10 million to $14 million in the quarter ending in March associated with one-time termination benefits paid to departing employees.

However, the company anticipates that the restructuring will save roughly $80 million, some of which it will invest in growth areas, which generally include cybersecurity as well as commercial and international work. Some of the savings will be held in reserve because of uncertainty about government spending, the company said.

Company officials said the cuts reflect an effort to adjust its mix of skills to better match areas where the government is spending. Strickland noted that Booz Allen reduced staff whose clients did not have near-term work available.

“We have markets that are growing substantially and markets that are flatter ... so we’re having to adjust our skill mix,” he said.

Horacio D. Rozanski, Booz Allen’s chief operating officer, said the company is having little trouble finding new employees for its growth markets

“We’re seeing talent available to us of quality and at levels that we probably haven’t seen for a while,” he said. “I don’t think we’re going to be constrained.”

$80M

Amount Booz Allen expects to save as a result of the restructuring, according to the company.

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