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Rolls-Royce slashes 9000 jobs worldwide

Posted 20 May 2020 · Add Comment

Rolls-Royce announced this morning that it will lose up to 9,000 jobs as it addresses the change in demand following the collapse of the aviation industry due to Covid-19.

 
The UK-headquartered company has a significant presence in Abu Dhabi with a regional customer service centre covering the Middle East and Africa and a number of joint ventures for the aftermarket for both civil and military customers.

In the statement this morning the company said that the impact of COVID-19 on Rolls-Royce and the whole of the aviation industry is unprecedented. “We have already taken action to strengthen the financial resilience of our business and reduce our cash expenditure in 2020. It is, however, increasingly clear that activity in the commercial aerospace market will take several years to return to the levels seen just a few months ago. We must now address these medium-term structural changes, as demand from customers reduces significantly for our civil aerospace engines and aftermarket services,” the company said
Warren East, Rolls-Royce, CEO 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.“

In an emotive comment to the 52,000 employees worldwide East said: “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.“

The company will also cut expenditure across plant and property, capital and other indirect cost areas. The proposed reorganisation is expected to generate annualised savings of more than £1.3bn, of which it expects headcount to contribute around £700m. The cash restructuring costs related to these actions are likely to be around £800m, with outflows incurred across 2020 to 2022.

The Defence business, based in the UK and US, has been robust during the pandemic” East said. “There is an unchanged outlook, and it does not need to reduce headcount. As part of the reorganisation, we will ensure that our internal Civil Aerospace supply chain continues to support our defence programmes and explore any opportunities to move people into our Defence business.

 

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