Defense giant Lockheed Martin [LMT] said Friday it expects that the automatic budget cuts that took effect earlier this month known as sequestration will at least result in furloughing employees and could have a more severe impact on thousands of jobs.
In addition to issuing furloughs, Lockheed Martin said it may have to lay off workers or issue 60-day notifications of possible layoffs under a federal law known as the Worker Adjustment and Retraining Notification Act, or WARN.
“We continue to assess the likely impact that sequestration will have on our programs and have taken steps to manage its effect on our employees and our business,” the company said in a statement.
“However, while we understand that the impacts are likely to play out over a period of time, we continue to believe that sequestration will lead to furlough in some situations and could trigger layoffs resulting in WARN notices to thousands of our current employees,” the company said.
President Barack Obama signed the directive ordering sequestration March 1 as was required under the Budget Control Act of 2011 and after the White House and congressional Democrats and Republicans were unable to agree on a deficit reduction plan and budget.
“The fiscal impasse continues to greatly complicate our ability to plan, make necessary capital investments, and recruit and hire the next generation of science and engineering talent,” Lockheed Martin said. “We urge our elected leaders to make it a priority to reverse sequestration before it causes more serious damage and find a more workable and permanent solution to the fiscal challenges our nation faces.”
A company representative said a timeframe has not been established for initiating furloughs or possible layoffs.