Maxwell Labs Lays Off 63 in Pentagon-Related Rollbacks : Economy: San Diego firm that makes high-energy pulsed power devices will reduce jobs in Balboa Division.

SAN DIEGO — Maxwell Laboratories laid off 63 employees Friday as part of a major cost-reduction plan designed to bring the company’s costs in line with shrinking defense-related revenue.

Friday’s layoffs were restricted to Maxwell’s Balboa Division, but company spokesman Sean Malloy said more layoffs are likely at other divisions of Maxwell, which, after the cuts, has about 630 employees in San Diego.

The layoffs at Maxwell were the latest in a series of cutbacks at San Diego companies that remain heavily dependent upon Defense Department spending. Revenue generated for San Diego County companies from federal defense spending fell by 1.7% to $9.6 billion during 1991, the first such decline since 1981.

The Reagan Administration’s military buildup was in large part responsible for San Diego’s dramatic economic growth during the 1980s, but the so-called “peace dividend” has “deepened San Diego’s already weakening economy,” according to Max Schetter, general manager of the Greater San Diego Chamber of Commerce.

Military spending cuts prompted General Dynamics to put most of its San Diego-based operations on the sales block. Civic leaders fear that thousands of high-paying manufacturing jobs could be lost as military spending falls and General Dynamics unloads its local businesses.

Cutbacks are “one of the economic realities for the remainder of the 1990s” at firms where defense spending had accounted for a hefty percentage of companies’ revenue, Malloy said.

Maxwell is a leader in the development of high-energy pulsed power devices that are used largely in defense-related applications. While Maxwell is seeking commercial markets for its technology, non-military sales have not grown fast enough to offset defense-sector reductions, Malloy said.

Maxwell indicated earlier this month that it would register a net loss for the fourth quarter ending this month. Maxwell reported a $935,000 net profit for the corresponding quarter in 1991.

In addition to layoffs, Maxwell will cut costs “by reducing overhead expenses, consolidating office and product development space, and merging certain operations and support functions,” Malloy said.

The cutbacks are designed to bolster profits during the coming year and make Maxwell “more competitive in future bidding efforts,” Maxwell Chairman Alan C. Kolb said Friday.