Lockheed Martin announced plans on Tuesday to lay off 1,200 people, with the largest impact in Denver, Sunnyvale, Calif., and Pennsylvania.
The layoffs will mean a staff reduction of about 8 percent in the Space Systems Company.
That segment of Lockheed Martin has about 16,000 employees in 12 states.
Operations across the country will be affected, according to a statement released by the company.
Officials said several of the company's major programs are transitioning out of development in Denver, Sunnyvale and the Delaware Valley region of Pennsylvania.
"In today's economic environment, we have two choices: make painful decisions now or pay a greater price down the road," said Joanne Maguire, executive vice president of Lockheed Martin Space Systems. "This is a difficult but necessary action to improve efficiencies and make our business more competitive going forward."
Space Systems said it will offer eligible salaried employees an opportunity for a voluntary layoff to minimize the number of involuntary layoffs that will occur.
Lockheed Martin Space Systems In Colorado
Lockheed Martin workers in Lakewood and Waterton Canyon are designing the new Orion capsule. It will replace the shuttle program by carrying four astronauts on missions beyond the Earth's orbit.
In March, Lockheed Martin dedicated a $50 million Space Operations Simulation Center in Littleton that allows engineers to test docking, landing and other systems to be used on the Orion spacecraft.
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