Lockheed Martin said Monday it will not issue employee layoff notices this year, ending an election-year showdown with the Obama administration.
The company said it based its decision on new guidance issued Friday by the Office of Management and Budget and the Pentagon.
The guidance said the Pentagon did not anticipate killing any contracts on Jan. 2, the day automatic spending cuts are set to begin hitting defense spending. The guidance also said the federal government would cover severance costs that are mandated under a federal layoff notices law.
The decision by Lockheed means tens of thousands won’t get layoff notices days before Election Day, which might have cast a crucial blow against President Obama’s reelection chances.
Other defense firms that had also indicated they could send notices of potential layoffs in November were following Lockheed’s suit Monday, saying they would not be sending them before sequestration took effect.