Yahoo Finance Rolls-Royce to cut 2,500 jobs
Rolls-Royce is to cut up to 2,500 jobs in a push to slash costs under its new chief executive.
The aircraft engine maker announced the layoffs on Tuesday as it said it wants to become a more “streamlined and efficient organisation”.
The Derby-based manufacturer has 42,000 employees globally, with over 21,000 based in the UK. It also has large workforces in Germany and the US, where 11,000 and 5,500 staff are based respectively.
New chief executive Tufan Erginbilgic, who took over at the start of the year, has previously described Rolls-Royce as a “burning platform”.
He also described one of its key subsidiaries as having been “grossly mismanaged”.
On Tuesday, he said: “We are building a Rolls-Royce that is fit for the future.
“That means a more streamlined and efficient organisation that will deliver for our customers, partners and shareholders. Our business is full of committed, talented people and I believe these changes will enable them to build greater capability in areas that are key to our long-term success.
“This is another step on our multi-year transformation journey to build a high-performing, competitive, resilient and growing Rolls-Royce.”
The redundancies have been expected for some time after Mr Erginbilgic in February set out his transformation plan to turn around the struggling company.
The latest proposal would see the company’s engineering technology and safety units become a single team, a move the company said would “enable engineering talent and technology to be used more effectively across the business”. Grazia Vittadini, Rolls-Royce’s chief technology officer, will leave the business in April, with the new department led by current product development director Simon Burr, who is joining the executive team.
There were reports that there could be as many as 3,000 layoffs in May, which Rolls-Royce rejected at the time.
Rolls-Royce shares have risen by 116pc so far this year amid a post-Covid-boom in aviation and as investors cheer news of cost-cutting measures.
It marks the beginnings of a turnaround after a highly painful pandemic saw the company cut jobs and raise billions to survive lockdowns.
The company, which makes engines for Airbus A350 and Boeing 787 planes, was hit hard by travel restrictions.
However, Mr Erginbilgic told staff earlier this year: “Rolls-Royce has not been performing for a long, long time, it has nothing to do with Covid, let’s be very clear. Given everything I know talking to investors, this is our last chance.”
Rolls-Royce’s shares leapt in February when Mr Erginbilgic’s transformation plan was announced, followed by another jump in July after it surprised investors with a big jump in profits.
The engineer posted profits of £524m for the first half of the year, compared to a £111m loss for the same period in 2022.
The company also managed to slash its debt by £500m to £2.8bn.
