Major Company Made $1.2 Billion In Profit In 2023 — And Just Laid Off 5% Of Its Employees
The layoffs come just months after L3Harris' CEO went on TV to boast of "double-digit growth."
Kaspars Grinvalds / Canva Pro Typically, corporations with multi-year profit bonanzas expand their companies rather than downsize them.
But that's the opposite of what major defense company L3Harris decided to do, and it has everyone from its staff to the mayor of the city where its headquarters is located angrily scratching their heads.
L3Harris laid off 5% of its employees despite making $1.2 billion in profits in 2023.
L3Harris is currently the sixth-largest defense company in the U.S. and has major contracts with NASA and militaries worldwide. It is also the largest employer in the Palm Bay area of Florida and the third-largest in Brevard County.
So, to say that laying off 5% of its staff sent shockwaves through the local community, where it has more than 7,000 employees, is an understatement.
The company claims, as reported by Florida Today that its move was to "right-size" rather than downsize its workforce (a ghoulishly patronizing turn of phrase that will surely be of great comfort to its former employees) after divesting itself of its commercial aviation businesses in November 2023 for $800 million.
That makes a certain amount of sense — you get rid of part of your business, and the employees go with it.
However, getting rid of employees is a bit hard to swallow, given its recent staggering acquisition spree and soaring profit increases.
L3Harris completed $6.66 billion worth of acquisitions in 2023, and its profits have skyrocketed by double digits.
L3Harris' $800 million divestment of its commercial aviation business and $200 million sale of its antenna business might sound like a lot, but they're nothing compared to the company's spending spree at the same time.
In July 2023, the company acquired rocket-engine maker Aerojet Rocketdyne for $4.7 billion and, six months earlier, part of internet company Viasat Inc's business for $1.96 billion.
At the same time, the company posted profits of $1.20 billion in 2023, a 12.9% increase from 2022, when profits were $1.06 billion. Its stock price soared — as have all defense companies' due to the ongoing wars in Gaza, the Middle East, and Ukraine. The company's involvement in those conflicts has made it the subject of recent protests, in fact.
But L3Harris itself has been downright celebratory—CEO Chris Kubasik appeared on CNBC in October to crow about his fifth consecutive quarter of growth at the company. He started his appearance by thanking the "50,000… resilient, hard-working" employees of the company, a sentiment that seems to have shifted since.
Employees and local leaders say L3Harris' layoffs came out of nowhere, and it's left them furious.
“No heads up, nothing,” is how former employee Chris Karsten described the wave of layoffs at L3Harris on Apr 11, 2024.
In what has become standard operating procedure nowadays, Karsten described being totally blindsided by his layoff and finding out about it when his access to the internet and email had suddenly been cut off.
“I lost my internet access to my company, laptop and email was gone within 10 minutes," he told local news station WFTV9. "I don’t even get to say goodbye to my co-workers, which was the worst thing."
The mayor of Melbourne, Florida, where the company's headquarters is located, shared this sentiment, telling Florida Today that "dedicated, longtime employees need to be protected" and that the company's handling of business is "very concerning to me."
For Karsten's part, he went on to say that he doesn't expect the company to preserve his job if it runs counter to the company's profit and dividends goals. He just expected a bit more consideration.
"I wish you would have given us a little bit more notice," he said. "People … just want maybe more time to find a job.”
L3Harris clearly feels differently. The company, in fact, bragged about the layoffs in a statement, casting them as part of what makes them a forward-thinking maverick in the defense industry.
"We have made the difficult decision to right-size our workforce," the statement read. "As our industry’s Trusted Disruptor, we will continue to think differently about how we deliver value to both our customers and our shareholders." So much for that gushing "thank you" to employees on CNBC.
John Sundholm is a news and entertainment writer who covers pop culture, social justice, and human interest topics.