Rolls-Royce is to cut 9,000 aerospace jobs as part of a major reorganisation of its business as the company seeks to cut costs in the face of the coronavirus pandemic.
This marks almost a fifth of the British engineering company’s workforce, which currently has 52,000 employees worldwide, 24,000 of whom are in the UK.
Rolls-Royce has said the job cuts could save around £700m as part of an overall target to save £1.3 billion in annual savings.
In addition to reducing its workforce, Rolls-Royce is also planning cut expenditure across plant and property, capital and other indirect cost areas.
The company has said that the cash restructuring costs related to these actions are likely to be around £800m, with outflows incurred across 2020 to 2022.
The proposed reorganisation will predominantly affect the company’s civil aerospace business, but will also have implications for its central support functions.
The company’s defence business, based in the UK and US, will not be affected, having remained robust during the pandemic.
Rolls-Royce CEO Warren East said: “This is not a crisis of our making. But it is the crisis that we face and we must deal with it.
“Our airline customers and airframe partners are having to adapt and so must we. Being told that there is no longer a job for you is a terrible prospect and it is especially hard when all of us take so much pride in working for Rolls-Royce.
“But we must take difficult decisions to see our business through these unprecedented times. Governments across the world are doing what they can to assist businesses in the short-term, but we must respond to market conditions for the medium-term until the world of aviation is flying again at scale, and governments cannot replace sustainable customer demand that is simply not there.
“We have to do this right, which means we will work closely with our employee and trade union representatives as appropriate, look at any viable alternatives to mitigate the impact, consult with everyone affected and treat our people with dignity and respect.”
East added: “The strategic choices that we have made over the last few years have helped us to respond rapidly to Covid-19 and the synergies between our divisions leave us well placed to capitalise on the long-term potential of our markets.
“The world on the other side of this pandemic will need the power that we generate to fuel economic recovery. I absolutely believe the call for that power to be more sustainable will be stronger than ever. This plays to our strengths.
“We must ensure that we are able to continue to innovate and play our leading role in enabling the vital sectors in which we operate achieve net zero carbon emissions. We have emerged from troubled times before, to achieve incredible things. We will do so again.”
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