Rolls-Royce, has confirmed that it plans to cut 4,600 jobs by 2020, adding to the thousands of cuts already announced in recent years.
The company says it expects the total cash cost of the restructuring to come in at £500m, which will include the cost of redundancies and the systems investments needed for the programme.
“Over the next 24 months, we expect the proposed restructuring will lead to the reduction of around 4,600 roles, predominantly in the UK where the majority of our corporate and support functions are based. Around a third of these roles are expected to leave by the end of 2018. The programme is expected to gain further momentum through 2019, with full implementation of headcount reductions and structural changes by mid-2020.” the group said in a statement.
The Derby based company, whose engines are used in Airbus and Boeing aircraft, said the latest cuts would produce annual savings of £400 million.
Chief Executive Warren East explains: “Our world-leading technology gives Rolls-Royce the potential to generate significant profitable growth. The creation of a more streamlined organisation with pace and simplicity at its heart will enable us to deliver on that promise, generating higher returns while being able to invest for the future.
“We have made progress in improving our day-to-day operations and strengthening our leadership, and are now turning to reduce the complexity that often slows us down and leads to duplication of effort. It is never an easy decision to reduce our workforce, but we must create a commercial organisation that is as world-leading as our technologies. To do this we are fundamentally changing how we work.
“These changes will help us deliver over the mid and longer-term a level of free cash flow well beyond our near-term ambition of around £1bn by around 2020. After a decade of significant investment we are committed to delivering improved returns while continuing to invest in the innovation needed to realise our long-term aspiration to be the world’s leading industrial technology company.”