Shipbuilding Giant HII Furloughs 471 Employees To Boost Performance

Newport News Shipbuilding has furloughed 471 salaried employees, affecting both managerial and non-managerial staff. The decision, which was communicated to workers via email on Friday, May 30, 2025, takes effect starting Monday and is expected to last up to five months.

The shipbuilder, a division of Huntington Ingalls Industries (HII), is Virginia’s largest industrial employer with a workforce of around 26,000. It is one of only two shipyards in the U.S. that build nuclear-powered submarines and the only one that constructs aircraft carriers for the U.S. Navy.

A company spokesperson said the furloughs are part of an effort to increase accountability, improve efficiency, and boost overall performance to meet current and future obligations to the Navy. The statement said that the furlough decision came after a detailed review of business needs and the salaried workforce.

The spokesperson clarified that this is a furlough, not a layoff, which means the affected employees are still considered employed but will not work or receive pay during the furlough period. They also cannot work for the company as contractors or leased employees while furloughed. At this time, no one is being reassigned to a different position.

Furloughed workers were given informational packets explaining their options, including the ability to cash out unused paid time off through June 1. They were also informed they could apply for state unemployment benefits, though approval depends on the state’s decision.

According to internal communication, the company chose who to furlough based on several factors, including ongoing and upcoming work needs, along with individual performance. The company has said it is realigning its workforce to match the evolving demands of Navy contracts and improve overall delivery timelines.

The news of the furloughs was first reported by WAVY. HII emphasised that it does not expect the furloughs to go beyond five months but will reassess throughout the period.

In 2024 alone, HII added around 3,000 workers and aims to bring in approximately 16,000 new employees over the next decade to support Navy shipbuilding programs. However, hiring and retention challenges continue to affect the shipbuilding sector, especially after the COVID-19 pandemic.

HII CEO Chris Kastner had previously said the company is now shifting away from recruiting inexperienced “green” workers and focusing instead on hiring experienced individuals committed to shipbuilding as a long-term career. This means hiring fewer people but with better retention and productivity.

Kastner said in April that young employees often left within a year, and the new hiring strategy would help address that issue. HII currently hires about 6,000 people per year.

Newport News Shipbuilding reported a 2.6 percent revenue decline, around $38 million, in the first quarter of 2024. This was attributed to reduced work on aircraft carriers and nuclear support services, although the Columbia-class submarine program saw an increase in activity.

The shipyard is simultaneously preparing to construct two Gerald R. Ford-class aircraft carriers, USS Enterprise and USS Doris Miller, in the same dry dock. These projects are part of a $15.2 billion Navy contract signed in 2019. The Enterprise is scheduled for delivery in 2029, and Doris Miller in 2032.

In April, the U.S. Department of Defense awarded HII a $1.2 billion contract modification for the construction of two Virginia-class submarines.

HII is also expanding its manufacturing capacity. In January, it completed the acquisition of a metal fabrication facility in Goose Creek, South Carolina. The site, now under Newport News Shipbuilding, includes 480,000 square feet of production space and employs about 475 workers.

Meanwhile, HII and General Dynamics Electric Boat are currently negotiating with the Navy and the Office of Management and Budget for two multi-year contracts covering the next 15 submarines.

References: USNI, virginiabusiness

Source: Maritime Shipping News