Economy

Rolls-Royce to cut 9,000 jobs in Covid-19 downturn

Rolls-Royce to cut 9,000 jobs in Covid-19 downturn”

Rolls' defence unit will be spared, though, as military demand remains robust.

Rolls-Royce has announced plans to cut 9,000 jobs - nearly a fifth of its workforce - as the coronavirus crisis takes a heavy toll on aviation.

Rolls-Royce (RYCEF) said itscivil aerospace business, which is concentrated in the United Kingdom and makes engines for Boeing (BA) and Airbus (EADSF) planes, will bear the brunt of the restructuring.

The British aircraft-engine maker said the proposed reorganization is expected to generate annualized savings of more than 1.3 billion pounds ($1.57 billion), and will come at a cost of around GBP800 million.

"This is not a crisis of our making", the CEO said in the release. "Our airline customers and airframe partners are having to adapt and so must we".

Airlines and their supplies have been among the hardest hit businesses by lockdowns to contain the pandemic, with passenger air travel grinding to a virtual halt.

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Rolls-Royce said it had already taken steps to reduce spending during the crisis but that it was now clear that it will take several years for commercial aerospace to pre-crisis levels.

"This is about adjusting our capacity to meet future demand", Rolls-Royce chief executive officer Warren East told BBC Radio on Wednesday.

The planned reorganisation it is undertaking in response to these changes will mainly affect its civil aerospace business, where it will carry out a detailed review of its facility footprint, it said. While talks with unions go on the company will not discuss which sites or countries will be affected.

Rolls-Royce said the impact of the pandemic on the company and the whole of the aviation industry "is unprecedented".

"We must respond to market conditions for the medium-term until the world of aviation is flying again at scale, and governments can not replace sustainable customer demand that is simply not there", Mr East said.



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