600 execs take Lockheed buyout

Lockheed Martin Corp.’s executive buyout program snagged 600 people who were willing to take an early exit from the company.

The buyouts, called the Voluntary Executive Separation Program, are part of a broader plan by Lockheed Martin to reduce costs and realign operations

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The 600 executives represent about 25 percent of Lockheed Martin’s executive ranks. The reduction in executives also aligns with a decline of 10,000 employees since the beginning of 2009, the company said.

Lockheed Martin expects savings in 2011 and on a recurring basis afterward, but the company did not release figures on how much money it expects to save.

The reduction in executives also is expected to cut overhead costs and management layers and increase speed and agility, the company said in its announcement.

“The VESP program will enable us to achieve significant cost savings and a leaner management structure at a time when our customers have an urgent need for more affordable solutions to the global security challenges they face,” said Lockheed Martin Chairman and CEO Bob Stevens. “We’re grateful to the executives who will be leaving, because we built this corporation on their leadership and dedicated service. The new reality of our business environment does not in any way detract from the respect and success they earned.”

In addition to the buyout program, Lockheed also has undertake other of what it calls “affordability actions,” including a business reorganization, the planned divestiture of two business units and a reduction in international trade show participation and advertising.

Lockheed Martin is ranked No. 1 on Washington Technology’s 2010 Top 100 list of the largest government contractors.