Thread regarding L3Harris Technologies layoffs

Meetings today with my leadership on how I am going to cross train and redeploy some of my technicians and testers in anticipation of a reduced workforce post spin. The electronic warfare business is the key component at our facility and employees the bulk of the people. I'm not going to mention my location or my job title here, but I intend to leave soon voluntarily.

1. The $1B convertible turns into IPO stock in the missileco at 20% discount. Moreover it has to be spent on the missileco so none of it covers L3harris' transfer of wealth from LHX to IPO stock. It all ends up in the missleco. Morever there are 3% warrants of total stock that can be added to the single-digit ownership that ultimately comes from the LHX shareholders being stripped.
2. For the IPO to have a clean balance sheet L3harris has to retain most of the debt from AJRD loans. L3harris is forecasting significantly lower EPS for 2026 from $12.40 down to $11.40. One has to wonder if this drop is from diminished earnings from giving away Missile business, no income debt interest, IPO costs, legal and brokerage fees, etc.
3. Unlocking Value is for those getting IPO stock. LHX stockholders will not be receiving any spin-off shares. While L3harris as a whole will retain original equity in AJRD of 51% - 80% that still represents a Loss in equity from the transfer of wealth to the IPO.
4. While expanding a market multiple sounds like a way to create free wealth, in reality LHX will have the long-term loss in income from whatever wealth was transferred in addition to Prime portfolio positioning.
5. AJRD was acquired at the most opportune time and quickly became the crown jewels of L3harris' growth. Typically, even a portion of the crown jewels are not given away. Missileco may receive inflation-adjusted contracts but it is hard to see how that will compensate LHX for perhaps $2-4B (80% - 60% ownership e.g. $10B IPO) in equity transference, while of course benefiting Missileco shareholders.
6. The more stock the Parent company LHX floats the more they will lose, if they don't receive any of the IPO sales and they don't offload any debt.

L3Harris retains control of missile solutions which includes assets from the former Aerojet Rocketdyne.
The U.S. Department of Defense (DoD) is investing $1 billion through convertible preferred equity.
This $1B investment converts into common equity only if L3Harris completes the planned IPO of the business. The reason for spinning off a chunk of the company, is that Washington was never going to give L3 Harris that billion dollars if it remained a whole company. It's a trust issue.

@2mq Might want to learn a bit about how an equity carve-out IPO works. Or at least wait until the S-1 is filed.

In this IPO, all AJRD loan debt stays on L3harris books, i.e. NO REDUCTION TO THE PARENTS $11B DEBT LOAD! All profits from the IPO go to the new company. L3HARRIS IS GIVING AWAY UP TO 49% OF THE MISSILE BUSINESS, LITERALLY GIVING AWAY ITS OWN EQUITY. They are not selling it because there is no income returned to the parent company.

@2fp The company is growing revenue. From $18.2B in 2020 to $21.9B in 2025 with a forecast of $23-$23.5B in 2026. Not huge growth but not shrinking.......

Seems like the plans to become one of the world's largest "prime" defense contractors have been flushed down the toilet. The new plan seems to be to get smaller and smaller. Since the last merger in 2019 what has happened?
L3 sold off the civilian avionics businesses.
Acquired AR only to break it into pieces and sell off all or part of them.
Re-organizing from 4 business units to 3.
Closed facilities.
Outsourced virtually all ancillary services.
Cut benefits to employees.
Eliminated company based retirement plans (pensions).
Has already reduced its' workforce by 5% with plans for at least another 5% this year.
It looks like they are slimming down the company to make it more attractive to a potential buyer. One more big payout to the stakeholders before moving on.
This is who we work for. If you've stayed out of loyalty, you're a misguided fool.

I've been asking my leadership about work related to Missile Solutions. How do we charge time to it? Will it be billed as a customer? He just looked at me and said, "You already know we're not going to be doing that work here anymore. Just hope another company buys this facility and keeps Clifton open. We dodged the bullet when we spun off from ITT 10 years ago, and we survived being acquired by Harris, and the merger with L3 in 2019, but I seriously believe our luck has run out for Clifton. The building is around down, 75 -year old money pit. We can't produce a good product anymore, and the talented people are long gone. At least you're close to retirement. You'll be okay. Anybody here younger than 62 is sc--wed".
S

@12h the spin-off, if that's what it's called, will not occur until after June or July of this year assuming they pass all of the regulatory scrutiny. Which, is a slam dunk since the department of war is already investing 1 billion dollars into the company. Missile solutions is only partially spun off, with L3 retaining a controlling interest. This is done to shelter the L3 Harris stock from being affected by potential poor performance from missile solutions which will be traded separately. If that business begins to tank, L3 Harris can cut it off and send it a drift on its own without affecting the rest of the company. Of course, that goes for missile solutions employees also. It's a convenient way to initiate a massive RIF without actually calling it that. Remember, the most desirable employees at L3 Harris are the ones least informed. Go along with the program, beat them at their own game, play d-mb but act smart.

Everyone needs to calm down. With L3 Harris still owning and controlling more than 50% of missile solutions, missile solutions is not a true standalone company. It is a controlled company. It's not subject to the same regulations such as having an independent board of directors. This is done to prevent a hostile takeover and another investor buying the bulk of the stock. Since L3 Harris will still control missile solutions, they can have work done anywhere they want.

Only a small number of leadership personnel will be offered the chance to relocate. Missile solutions at those two locations is already fully staffed and will continue to hire locally the people they need. If you are working on missile solutions related products outside those two locations, that work will be moved to those places. You will not. If you don't have something else to do, you're gone.

@12h will not be a rif. If you don’t go, they will consider you quit.

Will this be handled as a RIF, or will employees who do not relocate be ineligible for severance? Also, do you have an estimated timeframe for when this would take effect (e.g., six months or a year)?

@10m Yes, support for Trident II will not be done in Clifton any longer after the spin-off . Missile solutions work will move to Alabama and Arkansas. We expect a significant RIF from this.

@zp they are moving some the "preferred employees" from Space over to Missile Solutions to keep the YES team players and management

So if your site is under missile solutions and your not working in Alabama or Arkansas, we are being let go as an entire site?

L3Harris plans to retain a controlling interest (roughly 51-60%) in the new, standalone Missile Solutions company that will be spun off via an IPO in the second half of 2026. The Pentagon will invest one billion dollars of your tax dollars, but will be a silent partner with no seats on the board of directors. Missile solutions will operate from two locations; Alabama and Arkansas. No one else at any other location will be an employee of missile solutions nor will any of the work be done anywhere else unless there is a monetary exchange between the two locations as vendor and customer. Missile solutions will not be a subsidiary of L3 harris. It will be a standalone company with the majority of the stock and the controlling interest owned by L3 harris. This is temporary. Within a couple of years, maybe less, L3 Harris will relinquish its controlling interest with a smaller steak, or divest itself of missile solutions all together.

The locations for the new spin-off company have already been set up. Alabama and Arkansas will be where the work is done and where the new company will perform its work. All of it. Anyone who has been working on missile programs will obviously no longer be needed unless you are working in these two locations. That includes any former AR employees who are still working at L3 harris. Any hopes that some of that work would be moved to your location to prevent layoffs is folly.

@st you're forgetting the other reason so many people have stayed. Overpaid and underqualified. Most of the real talent has left already. What's left for the most part, are those that bullsh-ted their way into jobs and have been riding the coattails of other people since then. The problem for them is there are no more coattails to ride. If you're one of those, your professional future is bleak. You're eventually going to be laid off. That's just a fact. And where you go from here will be a much lower paying job. It su-ks to be you.

@st This! I spent 19 years here and this is exactly me. Go find something else and then chicken out or stay at L3 because it was paying a little more. In all honesty, the reason I didn't leave was because I was afraid to take the risk.

I finally did because I had no choice. I come back here to remind people that there is hope.

Go be wanted and appreciated, L3 is them and us, there is no social contract.

If you stay with the company, only to be laid off later. you've got no one to blame but yourself. It's not that hard to change jobs. It's an adventure. Stop hoping things will get better. Stop wishing. Just go out and do some serious looking instead of posturing in front of your leadership (who doesn't give a sh-t).
If you're unhappy and you stay anyway, you're a coward.

@j5 that is the underlying truth to all of these threads

no matter what or where you work in this company, you are always a readily disposable resource

there are better options that have job security, no they arent mega corporations, but at least it isnt an environment of fear, there s no perk to having worked for LHX

@cz is exactly correct the best thing you can do for yourself is stop being a Harrasite.

@OP Also wondering what this means in terms of our leadership. Ken has been leading the missile business while also being our CFO, and if he goes with the deal assuming that means we will get a leadership change in the ivory tower. The great search begins now on a new CFO...

The wildcard here is the Fed owning a voting share. Also it's not a leveraged buy-out, direct to IPO. It -might- be a little bit kinder. It's risky for sure as an employee. Update your resumes, apply for interesting jobs you haven't tried before, get practice. You may find a good role somewhere new or at least be prepared for the potential downsizing 6-months post spin.

Missile Solutions will be spun off into a standalone company just like Excelis and Xylem when they were spun off from ITT .
If you're old enough to remember that, only the shareholders benefited. The employees lost across the board. Their pay was less, their benefits were reduced, and the pension plan they had was gone. The employees who work on these programs associated with missile solutions will no longer be employees of L3 harris. They will be set adrift with a new company susceptible of being purchased by someone else, or broken into even smaller pieces. As l3 Harris begins to shed more and more businesses, it will reduce itself to a small subprime supplier, just like the once-great ITT . The major difference is that L3 Harris was never great. If you're an employee affected by this, nothing good is coming your way. Trust me. If you've ever had a reason to get off your a-s and move on, now is the time.

Simply put, it means l3 Harris will be spinning off its missile engine business into a separate company. And IPO is an initial public offering, meaning the shareholders will be able to buy this stock separately from the rest of l3 harris. It also means if you're an l3 Harris employee and you're involved in any of the missile defense business, you will probably be spun off with the new company. If you're lucky.

I just wish one of the laid off folks would put a middle up the cube ‘s a-s.