Rolls-Royce To Cut 2,600 Jobs Over 18 Months
Rolls-Royce says it plans to cut 2,600 jobs over the next 18 months, mainly in its aerospace division.Chief executive John Rishton said: “We are taking determined management action and accelerating our progress on cost.

“The measures announced today will not be the last, however they will contribute towards Rolls-Royce becoming a stronger and more profitable company.”

It was also announced that chief financial officer Mark Morris will be replaced by former Jaguar Land Rover chief financial officer David Smith, who took up the role of finance director at its aerospace division earlier this year.

The restructuring is expected to cost £120m over the next two years but the company said it should see cost benefits of £80m annually.

Sky sources say the job losses are due to general market conditions and are part of a series of cost cutting measures.

Speaking to Ian King Live, Business Secretary Vince Cable said he was “very concerned” when he learned of the cuts. He had spoken to the chief executive of Rolls-Royce on Tuesday morning.

“His view, which we share, is that Rolls-Royce is a very healthy company and its future is not in doubt. They’re going to be expanding their operations and taking on people, including new apprenticeships. That’s all positive,” he told Sky News.

“Their argument is that they are under a lot of competitive pressure.”

Shares in Rolls-Royce leapt 2.63% after the announcement.

Last month, the company warned that its underlying revenues for 2014 would be between 3.5% and 4% lower than expected, blaming the shaky economy and the effect of Russian trade sanctions.

Rolls-Royce grew from the electrical and mechanical business established by Henry Royce in 1884 but it now employs more than 55,000 people in 45 countries and its customers include 160 armed forces, 70 navies and more than 380 airlines and leasing firms.

Its UK employee base numbers 12,000 people at four locations in the East Midlands, as well as 1,500 at five sites in the North West and 2,400 employees at six locations in Scotland.

It has not been revealed which offices are most likely to be affected.

Rolls-Royce is best known for its aero engines which power some of the world’s most advanced passenger jets, such as the new Airbus A350 and the Boeing 787 Dreamliner.

The company is not affiliated with the Rolls-Royce automobile brand, which is owned by Germany’s BMW.

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