Rolls-Royce to Layoff at Least 9,000 People

Rolls-Royce has announced that it plans to layoff at least 9,000 people as a result of reduced business caused by the ongoing COVID19 pandemic.

In a statement issued on Wednesday, Rolls-Royce, said that it is “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's reorganisation will see at least 9,000 people lose their jobs, from a global workforce of 52,000.

In addition to the savings generated from this headcount reduction, Rolls-Royce will cut expenditure across plant and property, capital and other indirect cost areas.

The proposed reorganisation is expected to generate annualised savings of more than £1.3 billion, of which the layoffs will contribute approximately £700 million.

The cash restructuring costs related to these actions are likely to be around £800 million, with outflows incurred across 2020 to 2022.

Warren East, Rolls-Royce, CEO, 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.”

The proposed reorganisation will predominantly affect Rolls-Royce's Civil Aerospace business, but will also have implications for its central support functions.

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

Rolls-Royce says that its Defence business, based in the UK and US, has been robust during the pandemic, and will not see any layoffs.

As Rolls-Royce needs to consult with the appropriate employee and trade union representatives, it has not provided any further details of the impact of the proposed reorganisation on specific sites, or countries, at this stage.

 “The world on the other side of this pandemic will need the power that we generate to fuel economic recovery. I absolutely believe the call for that power to be more sustainable will be stronger than ever. This plays to our strengths. We must ensure that we are able to continue to innovate and play our leading role in enabling the vital sectors in which we operate achieve net zero carbon emissions. We have emerged from troubled times before, to achieve incredible things. We will do so again,” added Mr. East.

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