Dallas-Based Engineering Firm Dividing in Two

Jacobs Engineering Firm | Image by DCStockPhotography, Shutterstock

Jacobs, which is the largest engineering firm in the United States, recently announced that it will be dividing its operations between two autonomous divisions to help catapult it toward greater success.

The Dallas-based firm issued a press release announcing that its board of directors had unanimously voted to split its operations.

The move will separate the firm’s Critical Mission Solutions (CMS) business from its standard planning, consulting, engineering, and design work, effectively creating two independent companies.

According to the press release, CMS essentially represents Jacobs’ government services business, which generated approximately $4.4 billion in revenue in the fiscal year 2022.

As The Dallas Express reported in 2021, Jacobs was awarded a massive 10-year contract with the Department of Defense. This was Jacobs’ second government contract that year, preceded by another with the Defense Intelligence Agency.

It was already NASA’s largest service provider at the time, responsible for handling the mission control systems and engineering the organization’s next rockets.

CMS currently manages the launch infrastructure for NASA’s Artemis program at Kennedy Space Center in Florida, according to The Dallas Morning News.

The Dallas Express has extensively covered the Artemis program, which aims to establish a more significant presence on the Moon in order to explore deeper into space and even run missions to Mars. Artemis III is expected to launch in 2027, which will be the first manned mission to the Moon since 1972.

Alongside Jacobs, several firms from North Texas have been instrumental in seeing the Orion spacecraft — the space capsule at the heart of the Artemis program — take off. As The Dallas Express reported, SeyTec has acted as a stocking distributor for the program and is based in North Richland Hills.

Jacobs also worked on the government’s cleanup of a plutonium production site in Washington state, according to the DMN. This site was considered by the Department of Energy to be highly contaminated after operating for over four decades.

By having a separate division, CMS business is expected to benefit from being able to adopt a strategy that is laser-focused on the needs of government agencies, per the news release. It will be headed by current Executive Vice President and CMS President Steve Arnette.

Likewise, the firm’s traditional business portfolio will be streamlined, which will put it in a better position for growth. These activities brought in $10.5 billion in revenue in the fiscal year 2022.

Jacobs’ CEO Bob Pragada expressed his excitement over the decision that he believes will lead to higher profit margins and overall expansion.

“Today’s announcement is a significant milestone in our long record of taking bold actions to drive value creation,” Pragada said in the news release. “We believe the separation will create value for all stakeholders.”

Jacobs shareholders will receive stock in the new CMS company, which Pragada told the DMN is sure to fare well on its own.

“It has a great reputation as well as brand and performance in the aerospace and defense world and that is going to continue on,” Pragada said.

About 15,000 of Jacob’s 62,000 employees will shift over to form the new CMS division over the next year.

Pragada reported that the new company’s headquarters have not been determined yet, according to the DMN.

Jacobs relocated its headquarters from California to downtown Dallas in 2016 and has a workforce of more than 800 employees in North Texas.

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