Federal Contractor Issues Layoff Warnings, Citing Budget Uncertainty

February 21, 2013

European weapons maker BAE Systems reported stronger-than-expected earnings Thursday, after issuing conditional layoff notices to 3,500 shipyard employees in Florida, Hawaii and Virginia, citing uncertainty in the federal budget.

BAE Systems sent the layoff warnings Wednesday to comply with the 1988 Worker Adjustment and Retraining Notification Act, which requires companies with more than 100 employees to issue notices 60 days before mass layoffs or plant closures.

In an email to employees in Mayport, Fla.; Norfolk, Va.; Pearl Harbor, Hawaii; and San Diego, the company said an “intent to cancel” order from the Navy regarding ship maintenance availabilities necessitated the distribution of the notices.

A spokesman for BAE Systems told Government Executive that this round of WARN Act notices were tied to the upcoming expiration of the continuing resolution on March 27, not the budget sequester slated to take effect on March 1. He said the company was awaiting more information on specific program cuts from sequestration before evaluating possible layoffs.

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