Rolls-Royce ‘to cut up to 8,000 jobs after coronavirus sees Boeing and Airbus slash aircraft production’
BRITISH aero-engine maker Rolls-Royce is planning to axe up to 8,000 jobs, it is reported.
A restructuring plan will shrink the firm's workforce of 52,000 by up to 15 per cent, according to several people inside the company, the Financial Times reports.
Iconic Rolls-Royce is one of Britain’s most historic industrial names, and the company’s engines power Airbus (AIR.PA) and Boeing’s (BA.N) widebody jets.
However, more than 60 per cent of that fleet is now grounded, according to aviation data provider Cirium.
And Rolls-Royce is paid by airlines based on how many hours they fly.
Talks have already started with unions over what would be its "biggest single reduction in more than 30 years", the said.
Staff numbers are to be heavily reduced as a consequence of plummeting production by aircraft makers Boeing and Airbus - in response to the crippling of the air travel industry during the coronavirus pandemic.
Ryanair doesn't expect flights to return to normal for two years as the industry is decimated by the virus fallout.
The airline has warned staff to brace for thousands of job losses, as travel as we once knew won't bounce back until around 2022.
And British Airways - which employs 42,000 staff - is to cut a quarter of its pilots with 12,000 workers jobs at risk, according to reports.
LOCKDOWN HITS
Rolls-Royce did not immediately respond to a request for comment on the FT article, Reuters reports.
But the paper's report comes more than a month after the firm said it was going to "reduce activity" as a result of the coronavirus lockdown.
On March 27, in a statement on its UK civil aerospace facilities, Rolls-Royce explained that its "priority since the start of the Covid-19 outbreak has been to ensure the wellbeing of all our employees".
While it had been "actively implementing government guidelines, particularly those relating to social distancing, we have now decided to significantly reduce all but essential activity within our UK Civil Aerospace facilities for one week from midnight on March 27."
Back in March, Rolls-Royce said that by reducing work, it would help the firm "sustain modified operations and activities over a longer period.
"This will allow us to focus on supporting customers and vital services, including air freight operations, during the Covid-19 pandemic.
"During this time, we will continue to maintain our critical capability that ensures airlines can continue to operate."
UK MILITARY
The Government has designated Rolls-Royce as a key supplier for the UK military.
So, Rolls said it was "planning for our defence facilities in the UK to remain operational.
"We will continue to supply and support the engines that power military aircraft, naval vessels and other vehicles, many of which are being called upon to assist the relief effort, while observing all Government health and safety guidance."
On April 6, CEO Warren East said in an update that the firm had “found itself in unprecedented times, both as a company and as a key player in vital power markets across the world.
"I would like to thank all our 52,000 colleagues worldwide for their support, dedication and hard work at this time when difficult decisions are being made.”
NO NEW ROLES
Rolls-Royce said several weeks ago that it was scrapping its targets and final dividend to shore up its finances.
The firm said that “specific mitigation to reduce our cash expenditure” included cutting its spending on consulting and professional fees along with sub-contractor costs.
All non-essential travel has been slashed, while external recruitment has been shelved.
The form added: “Salaries for our senior managers and executive team will be reduced by 20 per cent for the rest of 2020.
“There will also be a corresponding reduction in fees for non-executive directors of the board for the remainder of the year.”
Most read in uk news
The FT reported that it's anticipated the axe would fall mostly on the civil aerospace business, "which employs 23,000 people worldwide and accounts for roughly half the group’s 2019 revenue of £15.4bn".
Derby, the historic base of the firm, is expected to suffer many job cuts, followed by civil operations in Singapore and Germany.
The FT said that Rolls has a 16,000-strong civil workforce in the UK, and that a quarter had already been furloughed as a result of the government's coronavirus measures.
