Lockheed Martin [LMT] on Monday said that it will restructure its Electronic Systems segment into two new business areas beginning on Dec. 31, a move the company says will save it about $50 million annually and better align operations with their customers.

Electronic Systems, which is one of four current business areas, will give way to Missiles and Fire Control (MFC) and Mission Systems and Training (MST). Both new business areas will take on various operations of the Global Training and Logistics (GTL) business unit within Electronic Systems.

The elimination of the executive management teams at Electronic Systems and the GTL business unit, which will result in the elimination of about 200 jobs, is responsible for the $50 million in projected annual savings. About one-third of those 200 jobs are vice president or director positions.

Eliminating the upper management layer at Electronics Systems will bring the managements of MFC and MST closer to their respective customers, Lockheed Martin said.

“This new structure will allow us to better support our customers around the world and positions our company for sustained long-term growth,” Chris Kubasik, Lockheed Martin’s vice chairman, president and chief operating officer (COO), said in a statement. Kubasik will become CEO of the company on Jan. 1, 2013.

The pending reorganization is the result of Kubasik’s focus on setting the nation’s largest defense company up to provide more affordable yet still highly capable solutions at time when defense spending is becoming increasingly constrained.

“For the past three years, Chris has led an effort to examine all aspects of our business in an environment where every dollar counts,” Bob Stevens, Lockheed Martin’s chairman and CEO, said in a statement. “This focus on maximizing value for customers and shareholders has already identified billions in savings for our customers and mad us more competitive.”

The MFC business area will be led by Rick Edwards, who began managing the business in June. This new business will have 16,000 employees, be headquartered in Dallas, and include programs such as the Terminal High Altitude Area Defense System, Joint Light Tactical Vehicle, PAC-3 missiles, and the logistics and other technical services from GTL.

The MST segment will be headed by Dale Bennett, who is currently president of the Mission Systems & Sensors business unit within Electronic Systems. Bennett will lead a business area of 19,000 employees headquartered in Washington, D.C., that oversees programs such as the Aegis Combat System, Littoral Combat Ship, MH-60 helicopter avionics, and the military and commercial training systems from GTL, including F-35 support.

Projected sales for MFC and MST will be issued when Lockheed Martin releases its financial guidance for 2013.

Marillyn Hewson, current chief of Electronic Systems, has previously been appointed to become president and COO of Lockheed Martin on Jan. 1, 2013.