While my corner of Raytheon was not nearly as nice as milspec's is, it was not the situation you describe either. Layoffs from my business unit were rare, though a former business unit had some serious problems after a number of contract losses and overruns. I got raises every year, though about half of them were shit.

We only got involved in big contracts, though. New business that wasn't measured in at least tens of millions was ignored, unless it was an add-on to an existing contract.