Rolls-Royce to cut 9000 jobs amid virus crisis

Daniel Fowler
May 20, 2020

"This is not a crisis of our making".

East, who joined from semiconductor developer ARM Holdings, has told investors that Rolls-Royce needs to save £1 billion (S$1.74 billion) this year as it faces the biggest challenge since the 1970s, when it was nationalized after entering liquidation.

"We haven't completely concluded on where the job losses will be, but. of our civil aerospace business approximately two thirds of employees are in the United Kingdom at the moment, and that's probably a good first proxy", he said on BBC's Today programme.

The British aircraft-engine maker said the proposed reorganization is expected to generate annualized savings of more than 1.3 billion pounds ($1.57 billion), and will come at a cost of around GBP800 million. "Our airline customers and airframe partners are having to adapt and so must we".

The engineering company, which makes plane engines, has warned that it will take "several years" before the airline industry fully recovers from the pandemic.

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'Being told that there is no longer a job for you is a bad prospect and it is especially hard when all of us take so much pride in working for Rolls-Royce'.

The job cuts will save about £700m a year and the restructuring will also reduce spending on plant and property, capital and other areas.

'But we must take hard decisions to see our business through these unprecedented times'.

The company's move to execute mass layoffs is the latest blow to the aviation industry from the Covid-19 pandemic.

It is paid by airlines based on how many hours they fly, meaning its earnings will be hit by the collapse in air travel which is expected to last for years. The company did not specify in which of its sites the job cuts will be made, citing a need for discussions with employee and trade unions before providing a breakdown.

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