Rolls-Royce to cut 9,000 jobs as Covid-19 takes toll
The industrial group Rolls-Royce is to cut 9,000 jobs, almost a fifth of its workforce, as the coronavirus crisis takes its toll on the aviation industry.
The jet engine manufacturer said it is targeting £1.3bn in annual cost savings to weather the protracted downturn caused by the Covid-19 pandemic that has grounded much of the world’s airlines.
The Derby-based Rolls-Royce, which employs 52,000 staff globally, said the job losses would be felt worst in its civil aerospace business, with about 8,000 roles being made redundant. The company also makes fighter jet, ship and submarine engines but it said there would be no job losses at its defence business.
Speaking on the Today Programme on BBC Radio 4, its chief executive, Warren East, indicated that the UK would be heavily affected. The group’s civil aerospace division employs almost 16,000 people in the UK. He said: “It’s fair to say that of our civil aerospace business, approximately two-thirds of the total employees are in the UK at the moment and that’s probably a good first proxy.”
The International Air Transport Association does not expect air travel to recover to 2019 levels until 2023, which will affect demand for airline tickets, plane orders and the engines that Rolls-Royce makes for those jets. However, a key proportion of Rolls-Royce’s civil aerospace earnings comes from aircraft owners paying regular service fees to company. A global grounding of airline fleets has hit those revenues significantly.
Pre-lockdown Rolls-Royce engines carried millions of airline passengers around the world every week. The company makes engines for the Airbus A330, A340, A350 and A380 jets, as well as the Boeing 777 and 787 Dreamliner.