BAE Systems Laying Off Hundreds at San Diego Shipyard
BAE Systems, Inc., the American subsidiary of the British aerospace and defense company BAE Systems plc (LON:BA), has announced that it will be laying off hundreds of employees at its shipyard in San Diego.
BAE Systems is witnessing a slowdown in its ship repair business, following which the company has decided to hand over much of the near-term repair work to external contractors. As a result, many workers involved in ship repairs are facing layoffs.
The company has stated that the job cuts at the naval shipbuilding facility in San Diego will affect about 300 employees. The layoffs are expected to take place in the first half of September.
BAE Systems’ San Diego repair shipyard currently employs a workforce of about 1,570 workers.
BAE Systems, Inc., which builds and repairs naval ships, is one of the largest suppliers and service providers to the U.S. Department of Defense. Just a few months ago, the San Diego repair facility was awarded a multi-million dollar contract from the U.S. Navy.
Bae Systems announced in November that the San Diego shipyard facility received a $192.7 million contract from the U.S. Navy. As part of the contract, BAE Systems was to construct and install naval combat systems on battle ships that are used as guided missile destroyers. Workers at the shipyard also performed repairs on guns and missiles installed on the U.S. Navy’s ships.
However, a recent change in the U.S. Navy’s acquisition process for repair services may be part of the reason why the San Diego facility is facing a slowdown in business and resorting to layoffs.
The U.S. Navy is no longer awarding repair contracts by bundling ship classes together. Instead, contractors are being awarded contracts on a ship-by-ship basis. The contractors must now compete to get the business for each project.
“BAE Systems Announces More Than 300 Layoffs for San Diego Employees,” NBC San Diego, July 11, 2017.
“Navy awards $192.7 million contract to BAE Systems,” ABC10 News, November. 21, 2016.