He says the company will lay off a total of 1,000 workers due to budget cuts at the U.S. Department of Defense.

Meanwhile, Secretary Gates says the budget cuts are part of a larger “re-balancing” of the military’s budget.

GATES: There are a lot of programs that we’ve plus-ed up, and where people will be hiring, and doing more.  There’ll be others where they will be reducing their capability.

Gates says the government isn’t spending less money on defense. It’s just re-prioritizing.

The Boeing layoffs will affect surface-to-air missile production and a program to build hi-tech vehicles for the Army.