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Rolls-Royce Cuts 9,000 Jobs As COVID-19 Takes Toll On Airlines
Rolls-Royce is set to cut 9,000 jobs, almost a fifth of its workforce, as the coronavirus crisis takes its toll on the aviation industry.
The jet engine manufacturer said it was targeting £1.3bn that is 624 billion naira in annual cost savings to weather the protracted downturn caused by the Covid-19 pandemic that has grounded much of the world’s airlines. Headcount cuts will account for about half the savings target.
Derby-based Rolls-Royce, which employs 52,000 staff globally, said the job losses would be felt worst in its civil aerospace business, with about 8,000 of the 9,000 roles being made redundant coming from that division. The company also makes fighter jet, ship and submarine engines but it said there would be no job losses at its defence businesses.
Rolls-Royce’s chief executive, Warren East, indicated that the UK would be heavily affected. The group’s civil aerospace division employs almost 16,000 people in the UK.
He said: “It’s fair to say that of our civil aerospace business, approximately two-thirds of the total employees are in the UK at the moment and that’s probably a good first proxy.”
A key proportion of Rolls-Royce’s civil aerospace profits comes from aircraft owners paying regular engine service fees to the company. A global grounding of airline fleets has hit those revenues significantly.
Pre-lockdown, Rolls-Royce engines carried millions of airline passengers around the world every week. The company makes engines for the Airbus A330, A340, A350 and A380 jets, as well as the Boeing 777 and 787 Dreamliner.
“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,” said East. “Governments cannot replace sustainable customer demand that is simply not there.”
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