Rolls-Royce cuts 9,000 jobs amid air travel slump

Derby-based Rolls-Royce plc said on Wednesday it plans to cut at least 9,000 jobs from its 52,000 global workforce amid a slump in demand for the aircraft engines it makes due to the coronavirus pandemic.

The UK factories of Rolls-Royce — which has plants in Derby, Bristol, Glasgow, and Barnoldswick in Lancashire — could face big job cuts amid the company’s “reorganisation.”

Unite, the union, said 3,375 of the job losses would take place in the UK.

“The impact of COVID-19 on Rolls-Royce and the whole of the aviation industry is unprecedented,” said Rolls-Royce.

“We have already taken action to strengthen the financial resilience of our business and reduce our cash expenditure in 2020.

“It is, however, increasingly clear that activity in the commercial aerospace market will take several years to return to the levels seen just a few months ago.

“We must now address these medium-term structural changes, as demand from customers reduces significantly for our civil aerospace engines and aftermarket services.”

Rolls-Royce CEO 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.

“Governments across the world are doing what they can to assist businesses in the short-term, but we must respond to market conditions for the medium-term until the world of aviation is flying again at scale, and governments cannot replace sustainable customer demand that is simply not there.

“We have to do this right, which means we will work closely with our employee and trade union representatives as appropriate, look at any viable alternatives to mitigate the impact, consult with everyone affected and treat our people with dignity and respect.”

Rolls-Royce said its proposed reorganisation is expected to generate annualised savings of more than £1.3 billion, of which its expects headcount reduction to contribute around £700 million.

“The proposed reorganisation will predominantly affect our Civil Aerospace business, where we will carry out a detailed review of our facility footprint,” said Rolls-Royce.

“It will also have implications for our central support functions.

“Our Power Systems business and ITP Aero are currently developing, negotiating and executing extensive measures to deal with the current situation.

“Our Defence business, based in the UK and US, has been robust during the pandemic, with an unchanged outlook, and does not need to reduce headcount.

“As part of the reorganisation, we will ensure that our internal Civil Aerospace supply chain continues to support our defence programmes and explore any opportunities to move people into our Defence business. 

“Due to the need to consult with the appropriate employee and trade union representatives, we are not providing further details of the impact of the proposed reorganisation on specific sites, or countries, at this stage.”

Unite assistant general secretary for manufacturing Steve Turner said: “The news that Rolls Royce is preparing to throw thousands of skilled, loyal, world class workers, their families and communities under the bus during the worst public health crisis since 1918 is shameful opportunism.  

“This company has accepted public money to furlough thousands of workers.

“Unite and Britain’s taxpayers deserve a more responsible approach to a national emergency. 

“We call upon Rolls Royce to step back from the brink and work with us on a better way through this crisis …

“We will be meeting with the company over the coming days to convince them to take a different approach, and pressing the government to step up to the plate to protect our manufacturing base.

“This is no time for the government to sit on the sidelines.

“UK manufacturing has shown that it can adapt quickly to the needs of the nation, working around the clock to produce the kit needed to protect the sick and key workers during this national crisis. 

“Do not let this incredible national resource go to the wall.  

“I repeat my calls to government: we urgently need you to work with unions and industry on a programme to take industry through the next phase of this crisis.   

“Establish a National Council for Recovery and work with us, sending a clear signal that there is a strategy to reposition UK Plc and build Britain out of this dreadful situation.

“That is what a nervous business community needs in order to keep investing in our jobs and communities.

“Without this plan more companies will sack more people and the mass unemployment, broken families and devastated communities that we all dread will become a stark reality.”

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Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.