DENVER (CBS/AP) – Aerospace and defense contractor Lockheed Martin Corp. plans to cut 1,200 employees in its space systems equipment division. The cuts include workers in the Bay Area.

The company said Tuesday that the cuts will be nationwide in America and trim the division’s 16,000-person work force by nearly 8 percent. The company said middle management will be reduced by 25 percent.

The cuts will most heavily affect areas where Lockheed Martin is winding down its contract work, such as Sunnyvale, the Delaware Valley region of Pennsylvania, and Denver. Lockheed said it will offer voluntary layoffs to eligible salaried employees to minimize layoffs.

The cutbacks come as budgetary pressures are prompting the Obama administration to pare back defense spending. On Tuesday, a House panel approved a defense spending bill that would impose limits on U.S. spending in Iraq and Afghanistan. By voice vote, the House Appropriations Committee approved the legislation that would provide $530 billion to the Pentagon and $119 billion for the wars in Iraq and Afghanistan. The bill is $9 billion less than President Barack Obama requested.

“It’s really all about the budgetary environment that is affecting our customers,” said Lockheed Martin spokesman Steve Tatum. “There are fewer new business opportunities on the horizon.”

The space systems division makes a variety of products, from satellites to spacecraft and missile defense systems, used by military and commercial customers. As new orders dry up for such high-tech systems, Tatum said Lockheed is cutting back on middle management across the division.

The company said it will keep producing satellites and other equipment that have already been designed and ordered. And it is transitioning some programs out of development and into production, including a satellite-based surveillance system called the Space-Based Infrared System and a communications system known as Advanced Extremely High Frequency.

Lockheed’s stock rose 78 cents to close at $79.64 Tuesday.

(Copyright 2011 by CBSSan Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. Wire services may have contributed to this report.)


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