Raytheon [RTN] yesterday said that effective April 1 it is consolidating its six operating segments into four in order to save money, streamline operations, increase productivity and better align itself with its customers’ priorities.
The reorganization will not impact Raytheon’s financial guidance for 2013 and is expected to result in $85 million in annualized savings, the company said.
As part of the new business structure, Thomas Kennedy, president of Raytheon’s Integrated Defense Systems (IDS) segment, has been named to the new position of executive vice president, chief operating officer of Raytheon. Kennedy will oversee the consolidation and manage the company’s day-to-day operations, directly leading the four business segments and the company’s enterprise functions such as Engineering, Technology and Mission Assurance, Contracts and Supply Chain, Business Development, and the Global Business Services group.
Intelligence, Information and Services (IIS), one of the four new businesses, will be led by Lynn Dugle, and combines Intelligence and Information Systems, and Technical Services. Dugle currently leads Intelligence and Information Systems. IIS had $5.5 billion in sales last year.
John Harris, president of the former Technical Services segment, will join IIS and report to Dugle as vice president and general manager of the business.
IDS will be headed by Daniel Crowley, who previously led the Network Centric Systems segment. IDS will now include C4I Systems and Air Traffic Systems projects and products. The expanded business had about $6 billion in sales last year.
Raytheon Missile Systems will now include Combat & Sensing Systems, along with Raytheon UK, and will continue to be led by Taylor Lawrence. The combined business had $6.5 billion in sales last year.
Raytheon Space and Airborne Systems will now include Integrated Communication Systems and Advanced Programs, and will continue to by led by Richard Yuse. The expanded business had $6 billion in sales in 2012.
“Our new structure will help us enhance productivity, agility and affordability in a challenging defense and aerospace market environment,” William Swanson, Raytheon’s chairman and CEO, said in a statement. Of Kennedy’s appointment to the new COO position, Swanson said, “As we continue to operate in an increasingly competitive budget environment, our ability to enhance our operations, expand our global reach, and coordinate our development opportunities is critical to our success.”
Raytheon said the consolidation is expected to result in 200 layoffs.