Raytheon Overhaul Looms, With Major Hurdles Ahead
NEW YORK Raytheon will soon embark on a much-needed restructuring of its newly forged defense business, but the effort will be costly in the short term. Management last week announced a fourth-quarter pretax charge of $495 million to cover the expense of cutting 8,700 jobs, or about 10% of the workforce, in Washington-based Raytheon Systems Co., the part of the corporation where the defense and electronics businesses are grouped. Additionally, Raytheon Systems will close 20 U.S. facilities during the next two years, which will be the costliest part of the overall restructuring. In total, the company anticipates reducing facility space by 20%. Raytheon Engineers and Constructors business unit also will feel the pain of the reorganization. It will lose about 1,000 jobs, or 6% of its workforce. As a result of the restructuring and special charges, the company was forced to post a fourth-quarter loss of $77.3 million, compared with net income of $177.4 million in the same period last year. For the full year, Raytheon earnings fell 31%, to $526.8 million, or $2.20 a share.