Northrop Grumman cuts 380 jobs at Va. shipyard

RICHMOND, Va. — Defense contractor Northrop Grumman Corp. said Friday it is cutting 380 salaried jobs at its Newport News shipbuilding facility, citing a need to control costs.

The company that builds submarines and aircraft carriers for the Navy said the reduction of about 2 percent of its 20,000 workers at the shipyard was necessary to improve efficiency and costs.

“While this is a very difficult decision, it is a critical and necessary step in order to control costs, effectively manage overhead, improve efficiency and lower the acquisition costs of our products to better secure the future of our shipyard,” Matt Mulherin, vice president and general manager of Northrop Grumman Shipbuilding-Newport News said in a news release.

Northrop Grumman said Friday the cuts are driven, in part, by the completion of major milestones on existing contracts. For example, the company said it is nearing the completion of the design of the Gerald R. Ford aircraft carrier.

The announcement marks the first reduction its Newport News facility has experienced in more than a decade.

Northrop Grumman said more than 100 of the affected employees have been identified as having prior trades experience and have been offered hourly positions, such as welders and electricians. The employees also will receive information on eligibility for severance benefits and other career transition services.

In October, the company said it was exploring “various alternatives for the potential separation of its shipbuilding business, including a spinoff or sale of the unit.”

Northrop Grumman is one of the Navy’s main sources of nuclear powered submarines, aircraft carriers and other warships. In 2009, shipbuilding accounted for $6.2 billion of its $33 billion in total revenue.

It had previously announced plans in July to shutter the Avondale shipyard near New Orleans in early 2013 and consolidate its Gulf Coast military shipbuilding at Pascagoula, Miss. About 4,600 people now work at Avondale.

Los Angeles-based Northrop Grumman, which plans to move its headquarters to Falls Church, Va., next summer, employs 120,000 people worldwide in aerospace, electronics, information systems, shipbuilding and technical services.

Northrop shares fell 86 cents, or 1.3 percent, to $63.21 in morning trading.