Rolls-Royce cuts 4,600 jobs mainly in Britain in restructuring overhaul

A Rolls-Royce logo is seen at the company's aerospace engineering and development site in Bristol
REUTERS
Lucia Binding14 June 2018

Rolls-Royce will cut 4,600 managerial and support jobs as it plans to simplify its business and save £1 billion by the end of 2020.

The jet engine company’s overhaul would cost it £500 million and be spread across 2018, 2019 and 2020, and will be reported as separate one-off costs so it can stick to its targets for free cash flow.

Most of the jobs affected will be in the UK, where the FTSE 100 company employs 26,000 out of a global workforce of 55,000.

The cuts will not involve the jobs of engineers.

"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,” chief executive Warren East said in a statement on Thursday.

A Rolls-Royce engine on the first All Nippon Airways (ANA) commercial flight of the Boeing 787 Dreamliner
AFP/Getty Images

"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 one billion pounds by around 2020," he added.

Mr East signalled the move in March as the company struggled to keep to its financial targets due to problems with its Trent 1000 engines.

He joined the company three years ago with a mandate to turn it around.

The company – which was established in 1904 – has seen around 600 managers leave since 2015 under a previous cost-cutting programme.

Rolls-Royce unveils super luxury SUV2015 under a previous cost-cutting programme.

In 2001, 5,000 jobs were cut, including 1,000 contracts.

Rolls-Royce was the world’s 16th-largest defence contractor in 2011 and 2012 when measured by defence revenues.

It had a market capitalisation of £22.22 billion in 2013 – the 24th largest of any company with a primary listing on the London Stock Exchange.

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