Rolls-Royce has announced plans to cut “at least 9,000 jobs” as it seeks to steer the business through the “unprecedented” disruption caused by COVID-19.

The engine-maker has announced a major reorganisation of the business which is expected to generate annualised savings of more than £1.3bn in annual cost savings to help it weather the downturn. A statement by the company said it has become increasingly clear that “activity in the commercial aerospace market will take several years to return to the levels seen just a few months ago.”

The cuts amount to almost a fifth of its workforce which would be most keenly felt in the civil aerospace and aftermarket services. In addition to the savings headcount reduction, Rolls-Royce will also cut expenditure across plant and property, capital and other indirect cost areas.

“We must face and deal with crisis”

Chief executive, 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.”

He added: “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.”

Reorganisation will affect Civil Aerospace business

The proposed reorganisation would predominantly affect Rolls-Royce’s Civil Aerospace business, where the company would carry out a detailed review of its facility footprint. It will also have implications for central support functions.

The statement added that Rolls-Royce’s Defence business, based in the UK and US, had been “robust” during the pandemic, with an unchanged outlook and would not need to reduce headcount.
The internal Civil Aerospace supply chain continues to support our defence programmes as part of the reorganisation and explore opportunities to redeploy employees into the Defence Business.

Rolls-Royce will not be providing further details on the impact of the proposed reorganisation on specific sites until after talks with employee and trade union representatives.

World will need power to “fuel economic recovery”

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 to 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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