British aviation engine manufacturer Rolls-Royce has announced that it plans to reduce its workforce by almost a fifth. This equates to around 9,000 jobs at the company around the globe.
With many borders being shut to international travel around the world amid the coronavirus pandemic, planes are grounded. There simply isn’t the demand to introduce new aircraft to fleets with such low passenger numbers, and demand for new engines has dropped significantly.
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The cuts come as part of a company-wide reorganization designed to find £1.3 billion ($1.6 billion) in annual cost savings to mitigate the impact of coronavirus-induced economic downturn. Rolls-Royce says the job cuts expect to save the company £700 million ($857 million). It is also undertaking a cash restructuring to find other savings.
“This is not a crisis of our making. But it is the crisis that we face and we must deal with it,” Rolls-Royce CEO Warren East said in a statement this morning.
“Our airline customers and airframe partners are having to adapt and so must we,” they added.
Rolls-Royce‘s civil aviation division will be the hardest hit. Its defense business in the UK and the US has not been impacted by the pandemic and will continue as normal.
Those are all the details Rolls-Royce has made public for now. It will now liaise with various employees and trade union representatives to progress the restructuring.