Raytheon lays off 225 employees in Tucson

Raytheon Missile Systems, Southern Arizona's largest employer, laid off about 225 salaried workers Monday, its first mass layoff since 2002.

April 20, 2010
Industry News

Raytheon Missile Systems, Southern Arizona's largest employer, laid off about 225 salaried workers Monday, its first mass layoff since 2002.

The Tucson-based company, the world's largest missile maker, has added hundreds of workers in the past few years, but it saw three major programs canceled recently due to defense budget cuts. However, Raytheon said the layoffs were part of a larger, periodic realignment of resources.

"To better align our work force to meet current and future business requirements, and achieve the right mix of talent to remain competitive in the marketplace, Raytheon Missile Systems is reducing staffing levels," Raytheon spokesman John Patterson said in an e-mail statement.

The employees will be offered severance benefits and outplacement help, he said. Raytheon would not discuss the job descriptions of the laid-off workers or the specific departments affected.

About half of the company's local workers are salaried engineers, with annual pay of up to about $80,000, Patterson said.

The layoffs represent about 1.9 percent of Raytheon's full-time payroll. The company reported 12,140 full-time-employee equivalents at the end of 2009, according to the Star 200 survey of the region's major employers.

Cuts in the nation's missile-defense budget claimed Raytheon's Exoatmospheric Kill Vehicle, a non-explosive warhead used in ground-based missile interceptors, and the Multiple Kill Vehicle, an effort to develop multiple warheads for missile interceptors.

Raytheon's Mid-Range Munition program, an effort to develop a precision-guided projectile for tanks, was dropped, along with other projects under the Army's canceled Future Combat Systems program.

But the company's Standard Missile-3 could gain from a move to build more smaller, sea- and land-based interceptors.

Patterson acknowledged the program losses but said the company was able to move employees directly affected by those cuts to other product lines. "The company is executing well on existing programs and is well-positioned to capture new business," he said.

The last time Raytheon had large layoffs was in 2002, when the company terminated about 400 engineers. At that time, Raytheon officials said the layoffs were prompted mainly by cuts to three Pentagon programs.

University of Arizona economist Marshall Vest said that while any layoffs are disturbing, Raytheon is one of the few major local employers that have added significant numbers of workers in the past year.

The locally based business unit of Waltham, Mass.-based Raytheon Co. added 600 jobs last year and has added 2,000 since 2003, according to the Star 200.

"There are a handful of (local) firms that employ people with those types of high-tech skills," said Vest, director of the UA's Economic and Business Research Center.

Southern Arizona's other major defense industry employers, including General Dynamics, Northrop Grumman and Scientific Applications International Corp., are based in Sierra Vista. General Dynamics and Northrop Grumman trimmed payrolls last year - though many Northrop workers went to a spinoff company - while Scientific Applications reported a small increase.

Displaced Raytheon engineers may find opportunities in the Phoenix area, home to major defense operations of Boeing Co., General Dynamics C4 Systems, Alliant Techsystems and Orbital Sciences.

The number of jobs Raytheon shed Monday is not likely to seriously damage the local economy, but such high-paying jobs do support others in the community, Vest said.

"It's the effect of those people spending their salaries in the local economy," he said.

An account executive of Aerotek, a local employment agency specializing in technical and professional jobs, said the displaced workers who want to stay in the area may find some opportunities in the aerospace industry.

"Here recently, things have started to pick up," Aerotek's Robert Ridling said. "I think Raytheon skills are transferable to a lot of places in the aerospace sector."

This article was written by David Wichner at the Arizona Daily Star