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Raytheon laying off 9,700
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January 23, 1998: 3:29 p.m. ET
Defense electronics company cites cost cutting, major restructuring
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NEW YORK(CNNfn) - In a move it attributed to the declining defense market, defense and electronics giant Raytheon Co. said Friday it is laying off 9,700 workers as part of a broad consolidation and cost-cutting effort affecting several of its units.
The move comes less than four months after federal regulators approved Raytheon's $9.5 billion acquisition of Hughes Electronics Corp.'s defense business.
In July, regulators cleared Raytheon's $2.9 billion purchase of Texas Instruments' defense electronics business, although to win approval, it had to shed a radar component manufacturing unit acquired from TI.
Raytheon Systems Co. will close 20 plants and scale back operations at six others over the next two years, cutting 8,700 jobs. Also, 2,700 engineers will be reassigned in the company.
The unit also said it will reorganize operations to eliminate duplication and excess production capacity.
Raytheon Engineers & Constructors will either scale back or shut down operations at 16 offices later this year and cut its work force by 1,000, or about 6 percent.
It also will close 28 international and 22 domestic marketing offices, reducing the total number to 67. The number of employees affected by the move was not detailed.
The company attributed the broad changes to a slowdown in the engineering and construction market.
"Today, only one month after creating Raytheon Systems Co., we are announcing some of the most dramatic changes ever at any defense company -- changes we believe will not only reduce costs but will also create the right structure for future growth," said William H. Swanson, Raytheon's chairman and chief executive officer.
Swanson said the moves put the company on track to meet its goal of reducing operations by 10 to 15 percent.
"In addition, combining and consolidating our defense business in this unprecedented manner enables us to generate global savings for the American taxpayer," he said.
Swanson said the company has struggled to deal with changing customer demands and massive declines in U.S. defense spending that have occurred in the 1990s.
"The actions we are taking today are not easy, but they are essential. It must be understood that without taking these measures, Raytheon, Hughes Aircraft and TI Defense Systems separately would have withered and, quite possibly, died," he said.
Raytheon Class B shares were off 7/8 to 50 on the news. 
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Raytheon Co.
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