Rolls-Royce is to shed 9,000 positions in response to the Covid-19 pandemic that has all but grounded the civil aviation industry.
The company said that the commercial aerospace market will take several years to return to pre-Covid-19 levels and is instigating a cut in expenditure – including plant and property – that will save over £1.3bn on an annualised basis.
Roll-Royce has a workforce of 52,000 and the reduction in headcount will account for around £700m in savings. Union Unite said it will leave ‘no stone unturned in our fight to protect skilled jobs’.
In a statement, 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.
“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.”
Rolls-Royce said its Power Systems business and ITP Aero are ‘currently developing, negotiating and executing extensive measures to deal with the current situation’. The company’s defence business in the UK and US is unaffected and as part of the reorganisation Rolls-Royce said it will ensure that its internal civil aerospace supply chain continues to support defence programmes.
“The strategic choices that we have made over the last few years have helped us to respond rapidly to COVID-19 and the synergies between our divisions leave us well placed to capitalise on the long-term potential of our markets,” East said. “The world on the other side of this pandemic will need the power that we generate to fuel economic recovery. We have emerged from troubled times before, to achieve incredible things. We will do so again.”
Responding to today’s announcement, Unite assistant general secretary for manufacturing Steve Turner said: “The news that Rolls Royce is preparing to throw thousands of skilled, loyal, world class workers, their families and communities under the bus during the worst public health crisis since 1918 is shameful opportunism.
“This company has accepted public money to furlough thousands of workers. Unite and Britain’s taxpayers deserve a more responsible approach to a national emergency. We call upon Rolls Royce to step back from the brink and work with us on a better way through this crisis.”