Waltham's Raytheon Eyes Further Downsizing: Report

WALTHAM, MA — Waltham-based Raytheon, which has long been one of the city's big businesses, could downsize operations in town in a way that could have implications for the city.

"If what Raytheon is considering is indicative of what larger corporations are thinking, there will be lesser demand in many of our office spaces," Waltham Assessor Frank Craig said. "That will increase vacancies and reduce revenue streams, and affect values of the commercial office space."

And that may not be such a good thing for the city for the next couple of years, he said.

As part of its merger with United Technologies Corporation announced last year, the aerospace and defense company was planning to consolidate office space by about 10 percent, or about 3 million square feet.

But amid the coronavirus pandemic and rise of remote work, the company has adjusted that goal. According to the Boston Business Journal, the company plans to let go of closer to 20 to 25 percent of its work space, BBJ reports. A spokesperson clarified to Patch that that reduction is referring to a global 20-25 percent reduction. Not just in Waltham.

The company could leave anywhere from 6.2 million square feet to 7.8 million square feet of commercial space open globally. That's more than 100 American football fields, according to BBJ. It's unclear how much of that - if any - would be in Waltham.

For the fiscal year 2020, the commercial tax rate in Waltham was $24.36 per $1,000 of assessed valuation. The Mass Medical Society owns the 11.1 acres at 860 Winter St., which the company rents. That property was last assessed at $32,869,000, meaning it contributed about $800,000 in real estate taxes, according to assessor data.

Regardless of whether Raytheon would step back its footprint there, Mass Medical Society will still have to pay the commercial real estate tax, however, the company is doing less business there, the assessment of the property could go down, according to the city's assessors office.

One of the things that happens when a big name such as Raytheon downsizes, is that other big corporations pay attention.

The question then becomes, if they decide this is the way to go, will others follow?

"In general, it’s a bit of a harbinger of office space having a little less demand, certainly in the short view here," he said in terms of city revenue.

But Craig is optimistic about the long view.

Technology based companies need lab space and equipment and teams collaborating, which means space.

"It’s a good thing that where Waltham is located is the high tech area, the Cambridge Boston area is great for high tech, so we get our share of it," he said. "And because there is that inability to do it from home it helps with our commercial base."

From 1922 to 1928, the company was headquartered in Cambridge before it moved to Newton until 1941. It then moved to Waltham for 20 years and had a large presence in the city. In 1961 it moved to Lexington until 2003. That year, it moved headquarters to its current 11-acre site on Winter Street. It also has offices in other parts of the state.

Raytheon announced last year that it would be consolidating its four businesses into two businesses to be named Intelligence, Space & Airborne Systems and Integrated Defense & Missile Systems. The new businesses join Collins Aerospace and Pratt & Whitney to form the four businesses of Raytheon Technologies.

Raytheon is one of the largest United States defense contractors and makes missiles, including the Patriot system, and cybersecurity tools. United Technologies, based in Connecticut, was founded in 1934 and makes aerospace and building products, such as airplane engines and spacesuits.

In early May, Raytheon said because of coronavirus, it would be furloughing employees, instituting a hiring freeze, deferring merit increases and cutting pay for some salaried employees to reduce costs by $2 billion.

Raytheon declined to comment further to Patch.

Related:

Waltham-Based Raytheon Furloughs Workers

Jenna Fisher is a news reporter for Patch. Got a tip? She can be reached at Jenna.Fisher@patch.com or by calling 617-942-0474. Follow her on Twitter and Instagram (@ReporterJenna). Have a something you'd like posted on the Patch? Here's how.