Leidos CEO says company would redeploy employees if Section 3610 expires

The chief executive of Leidos said today intelligence agencies are moving as "aggressively as they can" to find ways for contractors to work as a key provision that has kept sidelined employees on standby is set to expire.

During a virtual conference hosted by Citi, Roger Krone said Section 3610 of the Coronavirus Aid, Relief and Economic Security Act has covered the salaries of employees unable to work because of pandemic-related restrictions.

This has primarily affected Leidos employees assigned to intelligence agencies, he said, because social distancing has meant some employees cannot work at classified facilities. But Section 3610 is slated to expire Sept. 30.

"The conversation we've had with our intel customer is, if you can't cover our people under 3610, the risk is not that we would lay them off," Krone said. "The risk is we have open requisitions for those skills in our industries outside of intel."

"We will redeploy those people in the areas that are growing," he added.

Krone said the company has "made that point across the intelligence community."

"They are going as aggressively as they can to find ways to operate where they can bring more and more staff in, so we won't be beholden to this 3610 clause," he added.

In the fourth quarter, Krone said, he expects the intelligence group to "almost completely be back to pre-COVID" levels.

Krone stressed that he wouldn't seek to redeploy the company's workforce unless 3610 expires. If it does, he added, "there will be a limited period of time for which I can carry the workforce," by using paid time off and special leave.

But, "there will be a point of time where the economic burden of that doesn't make sense for me to carry and yes, we would redeploy those people into open requisitions."