The Los Angeles Times reported on Monday “Northrop to shed nearly 600 jobs.” The article includes all of the industry’s talking points about “budget uncertainties,” “jobs lost,” and “more cuts,” and even uses the erroneously high $600 billion amount for defense sequestration (the correct amount is $492, as ProPublica’s critique of media using the $600 billion figure illustrated). Unfortunately, the article not only overstates the actual amount of Pentagon sequestration by more than $100 billion, it also fails to put Northrop’s job-shedding into context. For those interested in a little more balance in their sequestration news, here are a few facts to mull over before jumping on the contractor “doomsday” bandwagon.
First, Northrop has reduced its workforce every year since 2008, cutting thousands of workers every year during a time in which its Department of Defense contract dollars remained fairly constant. Employment figures from its SEC filings for 2008, 2009, 2010, and 2011 chronicle this downsizing. Northrop wasn’t the only defense contractor to cut jobs either. In the past five years the top five defense contractors—Lockheed Martin, Boeing, General Dynamics, Northrop Grumman, and Raytheon—collectively cut nearly 20,000 jobs while their contracts from the DoD increased by more than $10 billion. In short, if there is any connection between revenue and employment it has, at least recently, been in the opposite direction that Northrop would have us believe.