Rolls-Royce is set to cut over 5,500 jobs by the end of the year, ahead of its prior expectation of 5,000.
The major reorganisation programme has come as a result of the reduction in demand for the company’s Civil Aerospace products and services in the pandemic. Rolls-Royce expects it will take several years to recover from COVID-19’s impact.
In a trading update released today (11 November) the Derby firm said it had made good progress towards its target for £1.3 billion of pre-tax cash cost savings and a reduction of at least 9,000 roles by the end of 2022.
Rolls-Royce is also currently in consultation regarding the next phase of its Civil Aerospace footprint review, which includes a proposal to transfer its facility and workforce in Hucknall, UK, which manufactures a range of aero-engine parts, into ITP Aero. The company is also proposing to consolidate the manufacture of aero-engine structures into ITP Aero and is planning to sell ITP Aero.
Rolls-Royce said that its mitigating actions to preserve cash in 2020 are on track to deliver more than £1 billion of in-year savings in 2020.
Warren East, CEO, said: “We have taken decisive actions to protect and reposition our business in difficult and uncertain trading conditions, including the impact from a second wave of COVID-19.
“We have made rapid progress on our restructuring programme and the consolidation and reorganisation of our Civil Aerospace footprint is well underway. Our £5 billion recapitalisation package in November was well supported and has increased our resilience and strengthened our balance sheet.
“The outlook remains challenging and the pace and timing of the recovery is uncertain. However, our actions have given us a strong foundation to deliver better returns as our end markets improve and we continue to drive our ambition of delivering more sustainable power to support the creation of a net zero carbon economy.”