Rolls-Royce said it will cut at least 9,000 jobs and slash costs elsewhere due to the impact of COVID 19 on the aviation sector.
“This is not a crisis of our making. But it is the crisis that we face and we must deal with it,” chief executive Warren East said in a statement announcing that Rolls-Royce would cut nearly 20% of its global workforce.
Rolls-Royce said in the statement that it is proposing a major reorganisation of the business in order to adapt to the new level of demand it is seeing from customers
“As a result, we expect the loss of at least 9,000 roles from our global workforce of 52,000. In addition to the savings generated from this headcount reduction, we will also cut expenditure across plant and property, capital and other indirect cost areas.
The proposed reorganisation is expected to generate annualised savings of more than £1.3bn, of which we expect headcount to contribute around £700m. The cash restructuring costs related to these actions are likely to be around £800m, with outflows incurred across 2020 to 2022, the company said in a statement.
“Our defence business, based in the UK and US, has been robust during the pandemic, with an unchanged outlook, and does not need to reduce headcount,” it added.