Rolls-Royce To Cut 4,600 Jobs

Rolls-Royce has confirmed that it will make deep job cuts, with 4,600 people to go over the next two years, in a fundamental restructuring of its business.

About a third of the jobs will go by the end of 2018, with more during 2019, and the “full implementation of headcount reductions and structural changes by mid-2020,” the company said in a statement.

Most of the job losses will be middle management positions at its Derby headquarters in the UK.

The changes follow a January announcement that the company would simplify its structure to three business units - civil aerospace, military and power systems.

“We have made progress in improving our day-to-day operations and strengthening our leadership, and are now turning to reduce the complexity that often slows us down and leads to duplication of effort,” chief executive Warren East said.

“It is never an easy decision to reduce our workforce, but we must create a commercial organisation that is as world-leading as our technologies. To do this we are fundamentally changing how we work.”

The cost of the redundancy programme is expected to be GBP£500 million (USD$665 million), with savings of £400 million ($532 million) per year by the end of 2020.

During the restructuring Rolls said it will ensure that it delivers on its commitments to customers and does not anticipate any reduction in the skills and capabilities required on its current programmes.

It said it will remain focused on dealing with the problems on some Trent 1000 aero-engines that power the Boeing 787 Dreamliner.

Rolls said earlier this week it would widen the number of engine inspections after an additional series of Trent 1000s were found to suffer from compressor durability problems.

A number of airlines have had to ground some of their 787s while the compressor problems are solved and replacement parts manufactured and fitted.

Rolls-Royce currently employs 55,000 people in 50 countries.