Johns Hopkins Gazette: April 3, 1995

Remaining Competitive Drives APL to Staff Cuts

     The Applied Physics Laboratory's decision to cut its
full-time work force by about 350 is driven not just by cuts in
federal defense spending, but also by possible changes in the way
the Pentagon does business, lab director Gary L. Smith said.

     As the defense budget shrinks, the Navy has become
interested in opening up for competition some of the work that--
because of APL's unique capabilities--historically has gone to
the Hopkins lab through sole-source contracts.

     "We must be prepared to compete effectively for these tasks
in appropriate circumstances, and cost will be an important
factor in our being successful," Dr. Smith said in a letter to
his staff last week announcing the first widespread layoffs in
the lab's 53-year history.

     The director said that total lab funding this fiscal year--
from the Navy and other sources--is now expected to total no more
than $407 million, a cut of 13 percent from last year's $466
million. Budget estimates for next year are even lower.

     The APL work force cuts come at a time of great uncertainty
for all defense contractors. As federal defense spending has been
reined in, there have been a number of mergers among defense and
aerospace companies. There also have been substantial layoffs in
both merged and stand-alone companies, including some industry
giants with major facilities in Maryland.

     Dr. Smith said APL has worked hard to control costs and
avoid major layoffs, but that the current budget outlook leaves
little choice.

     "Reductions in non-labor costs will not be sufficient," he
said. "Reductions in the size of the staff will also be

     APL spokeswoman Dee Reese said the lab expects to lay off
about 7 to 9 percent of its own full-time staff of about 2,750,
and to cut the number of contractors' employees working at APL--
presently about 700--by about 19 to 21 percent.

     "Even though the size of the planned staff reductions is
modest compared to many already experienced by other
defense-related organizations, it is still a painful decision for
us to notify even a single employee of such action," Dr. Smith

     APL, founded in 1942 and now located just south of Columbia,
Md., is a major research and development center for the Navy,
working on technology for weapons, command-and-control and other
systems. It is also the largest private employer in Howard

     Though the Navy accounts for the bulk of APL's budget, the
lab also does work for other government agencies--such as NASA
and the Department of Transportation--and works on research
projects in collaboration with other Hopkins divisions,
particularly the schools of Medicine, Engineering, and Arts and

     Notices will go to affected APL employees by the end of May;
most of the reductions should take place by the end of August,
Reese said. There will also be layoffs among part-time and
temporary staff, but the extent of those cuts has not been

     All lab departments will be affected, but not necessarily in
equal proportion, Dr. Smith said. Decisions on which will be
hardest hit will depend on which programs can be expected to
continue to attract the funding needed to support them.

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