Aerojet Rocketdyne announced plans this week to effectively shutter operations in Rancho Cordova. Citing its Competitive Improvement Program (CIP), which the company adopted in 2015, the cuts are aimed at keeping Aerojet as a competitor in its market. The company will downsize approximately 1,100 jobs in the area, leaving 300 staff in place.

“We are two years into the first phase of our CIP affordability drive and the consolidation progress, and overhead cost reductions achieved to date have exceeded our expectations,” said Aerojet Rocketdyne CEO and President Eileen Drake. “We intend to build on this success by expanding our CIP-related consolidation efforts so we can deliver the value our customers demand and position our company for further growth.”

According to the company, the Rancho Cordova positions will primarily be moved to the headquarters for the Aerojet Rocketdyne Defense and Rocket Shop"  Defense Advanced Programs in Huntsville, Alabama by next year. This includes, “Defense-related program management, engineering and related support positions.” Other jobs will migrate to Los Angeles to the company’s Space headquarters. A Gainesville, Virginia-based site and another in Vernon, California are also on the chopping block, with the company announcing these closures in the near future.

“We believe these actions are essential for the performance of our business and the growth of the company. The results from this initiative will benefit our valued employees, customers and shareholders alike,” Drake commented.

Phase II of the CIP will continue consolidation for the next two years and plans to remove the company entirely from Sacramento by the end of 2019.

A new manufacturing facility in Huntsville is scheduled to open in 2019 and will house Additive Manufacturing, Composites production and Research & Development and AR1 engine production. The existing Rancho Cordova site is slated to become “the Shared Services Center of Excellence,” once all production commitments have been completed.

“This expanded CIP effort is expected to result in $230 million in annual savings once complete, inclusive of the $145 million from the first phase of CIP,” said Drake. “Given the dynamic nature of this industry, strategic business decisions such as these, while difficult, are critical to establishing a solid course for our future.”