Defense Contractors Downsized in Good Times, Report Finds

August 8, 2012

The defense industry and Republican lawmakers have for months complained that sequestration -- across-the-board budget cuts scheduled to begin on Jan. 2, 2013, and expected to hit the Defense Department especially hard -- would devastate private contracting companies, forcing mass layoffs when the economy could least afford them.

A new report from a good government group, however, shows the industry has seen significant job losses during the past several years, even as the federal government shoveled more and more money to Defense contractors. The findings may suggest government spending and the contractor workforce are not as tightly correlated as sequestration critics fear.

Ben Freeman of the Project on Government Oversight pointed to the decline in the number of employees from the five largest Defense contractors -- Lockheed Martin Corp., Northrop Grumman Corp., General Dynamics, Raytheon Co. and Boeing Co. -- within the past five years, despite those companies receiving considerably more money from the U.S. government in 2011 than it did in 2006. 

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