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3,000 apply for redundancy at Rolls-Royce

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·Senior City Correspondent, Yahoo Finance UK
·2-min read
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BRISTOL, UNITED KINGDOM - JULY 02: A close-up of the Rolls-Royce factory sign in Filton on July 02, 2020 in Bristol, United Kingdom. Many UK businesses are announcing job losses due to the effects of the coronavirus pandemic and lockdown. (Photo by Matthew Horwood/Getty Images)
A close-up of the Rolls-Royce factory sign in Filton on July 02, 2020 in Bristol, United Kingdom. Photo: Matthew Horwood/Getty Images

3,000 people have applied for redundancy at engine maker Rolls-Royce (RR.L), part of plans to cut 9,000 jobs globally.

Rolls-Royce said on Thursday its restructure, announced in May, was “progressing well.” 3,000 people have applied for its voluntary severance programme, which was opened last month, and about 2,000 of those are expected to leave the company by the end of August.

Rolls-Royce announce sweeping cutbacks to its business in May in response to the COVID-19 pandemic. The vast majority of the 9,000 job cuts fall on its aviation business, which makes engines for planes.

“These are exceptional times,” chief executive Warren East said in a statement on Thursday. “The COVID-19 pandemic has created a historic shock in civil aviation which will take several years to recover.

“We are taking steps to resize our Civil Aerospace business to adapt to lower medium-term demand from customers and help secure our future.

“This means we have had to take the very difficult decision to lose people who have helped us become the company we are and who have been proud to work for Rolls-Royce. It is my first priority to treat everyone – whether they are leaving or staying - with dignity and respect.”

Read more: Rolls-Royce to cut at least 9,000 jobs

Rolls-Royce saw £3bn ($3.7bn) leave the business in the first half of 2020 as income slumped. The company said cash outflow was set to slow to just £1bn in the second half of the year thanks to cost saving plans.

The company has also increased its liquidity to £8.1bn to help it manage the tough environment.

“We will take the lessons of how we have dealt with this unprecedented challenge with us and position ourselves to emerge as an even stronger company in the future,” East said.

Rolls-Royce shares fell 10% last Friday after reports in the press that the company was looking to raise additional cash, either from shareholders or by selling off assets.

“There was no mention of raising additional capital in todays’ Q2 update which has seen management say that they expect a better performance in the second half of the year,” said Micheal Hewson, chief market analyst at CMC Markets.

Shares in Rolls-Royce dropped 7.1% on Thursday morning.

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