Large Contractor Undertakes Sequestration-Related Layoffs

A large government contractor sent layoff notices to employees, citing the budget uncertainties caused by the across-the-board spending cuts from sequestration.

L-3 Communications Systems announced that it was reducing its staff in its Salt Lake City office by 190 employees, or 4.2 percent. The company said the action was being undertaken “after careful consideration to maintain the division’s overall competitiveness,” and said the “declining budget environment and uncertainties due to sequestration” were factors in the decision. The company develops communications systems for the Defense Department and other federal agencies.

In an email to Government Executive, a L-3 Communications Systems spokeswoman said that the company did not send out Worker Adjustment and Retraining Notification notices --also known as WARN Act notices -- because they were not necessary in this circumstance. The 1988 WARN Act requires any company with more than 100 employees to issue layoff notices 60 days in advance of any mass layoff or plant closure.

Reston, Va.-based Serco Inc. in early April distributed WARN notices to 770 employees in Maryland and Virginia. A spokesman told Government Executive that the notices were sent because of the “possibility of what may happen due to sequestration.”

L-3 Communications Systems said that affected employees would be given “separation payments and outplacement assistance.”

Other large contractors including Lockheed Martin Corp., Boeing Co., General Dynamics Corp., and BAE Systems have undertaken layoffs to help realign costs in light of a shrinking defense and government market. None of those companies, however, cited sequestration as the primary reason for their workforce restructuring.

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