SAIC plans layoffs, cost cutting
Loss of a contract may result in 150 layoffs at Virginia location
- By Washington Technology staff
- Mar 26, 2013
Science Applications International Corp. might not have a federal contract renewed, which could result in 150 layoffs in its Falls Church, Va., office as a result, the Washington Business Journal reported Thursday.
The company also is looking to cut another $350 million in annual costs, including $220 million by simplifying its structure and reducing administrative overhead, the Washington Post reported.
The Falls Church layoffs are tied to five-year, $45 million contract that supported the Advanced Information Technology Systems program, and ends May 22.
The company had had competed for the contract, but the GSA’s Federal Systems Integration and Management Center awarded the work to L-3 Communications Holdings Inc. SAIC will help those 150 employees find other jobs, the Washington Business Journal quoted spokeswoman Jennifer Gephart as saying.
SAIC executives spoke about the need to reduce overall costs during an analyst call following the release of its quarterly report Tuesday, the Post said.
Among its cost cutting moves are improvements in how its buy things. The company said it could save $30 million annually by taking actions such as using preferred vendors, the Post reported.
The cost cutting comes as SAIC is planning its split into two companies, which should be completed sometime in the next nine months.
In its quarterly report, the company said it had $2.71 billion in revenue for the fourth quarter, which ended Jan. 31 versus $2.5 billion for the same quarter last year. It had $11.2 billion in revenue for the year, compared to $10.5 billion in 2012. Operating income for the quarter was $145 million, compared to a loss of $114 million last year. Operating income for the year was $734 million versus $299 million last year.
Operating income took a hit last year because of the $500 million the company paid to settle the CityTime scandal, a trouble IT project SAIC had in New York City.