The Derby-based manufacturer said it expects the job losses from its global workforce of 52,000 as part of a ‘major reorganisation’ of the business to adapt to a fall in demand for its engines as planes remain grounded.
The iconic British company employs 24,000 staff in the UK, around 16,000 of whom are aerospace engineers. However, it is not yet known how many jobs will be cut here.
Rolls-Royce CEO, Warren East said the job cuts were necessary to protect the company’s future amid the huge slump in demand for the company’s plane engines caused by coronavirus
Rolls-Royce said the cuts could result in £700 million in savings towards an overall aim of £1.3 billion in annual savings.
It said it will also cut spending across its plant, property and other areas to strengthen its finances.
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.
‘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 job losses would mostly take place in its civil aerospace business, the company said, as it started consultations with unions.
The global aviation industry has taken a battering from the impact of coronavirus, with most airlines only going ahead with a handful of flights.
Britons have been warned against all but essential travel, in line with many other countries, while the prospect of a compulsory two-week quarantine for people returning to the UK could put even more people off flying.
It is estimated that 140million fewer passengers will take to the air this year, hitting the sector with an estimated £21.1billion in lost revenue.
Rolls-Royce’s rival, Airbus, revealed in April it is ‘bleeding cash’ and feared its very existence was under threat.
Rolls-Royce said it expects the job losses from its global workforce of 52,000 as part of a ‘major reorganisation’ of the business to adapt to a fall in demand. Pictured is one of the company’s Trent XWB being built at its factory in Derby in 2016
Airbus employs 13,500 people in the UK, including in Broughton, North Wales, and Filton, Bristol, where wings for commercial aircraft are designed, tested and built.
Both Airbus and Rolls-Royce have lobbied the government on behalf of Virgin Atlantic, a customer, after Sir Richard Branson’s airline asked for a £500m bailout.
In line with many other countries, Britons have been warned against all but essential travel, while the prospect of a compulsory two-week quarantine for people returning to the UK could put even more people off flying.
Meanwhile, senior British Airways cabin crew are facing a staggering 55 per cent pay cut with salaries slashed to £24,000 in yet another blow to the airline industry.
Airline bosses wrote to employees outlining the potential new salaries, and announced they are consulting unions over possible job cuts, with 4,700 jobs on the line.
Crew numbers could be nearly halved from 1,860 to 971 and main crew numbers risk being cut from 12,402 to 8,591 as the airline grapples to stay afloat amid strict travel restrictions.
Elsewhere, Tui is cutting up to 8,000 jobs, while 16,000 face the axe at plane maker Boeing and 3,000 at Ryanair.