Rolls Royce to Restructure and Cut 4,600 Jobs
Rolls Royce announced on June 14, 2018, it would cut 4,600 jobs by 2020, mainly in the United Kingdom, in order to simplify its operations and save up to £400 million a year.
The company confirms the rumors reported by the Sunday Times on June 10, 2018. The downsizing will affect about 8% of the 55,000 people that Rolls Royce employ in over 50 countries. The changes will affect the most the company’s main plant in Derby, England, where most of administration and intermediary management is employed. With the simplification of the structure, a lot of redundancy in management is bound to happen, hence the layoffs.
“Around a third of these roles are expected to leave by the end of 2018,” is explained in an official statement by Rolls Royce. “The programme is expected to gain further momentum through 2019, with full implementation of headcount reductions and structural changes by mid-2020”.
Rolls Royce will now be divided into three main branches instead of five: Commercial Aerospace, Defence Aerospace and Power systems. The British manufacturer is looking into selling its under-competing Commercial Marine business, while the Nuclear department will be merged with Defence.
The reorganisation of activities will cost £500 million over the next three years, including termination compensations and the creation of new structures. This follows an audit of the company by the restructuring firm Alvarez & Marsal as announced along with 2017 results back on March 7, 2018.
Rolls Royce is going through several years of financial struggles, with a record loss of £4.6 billion in 2016, before bouncing back in 2017. The company already cut several hundred jobs through the years, especially in its Marine department.
Source – AeroTime