LONDON—Rolls-Royce plans to cut at least 9,000 jobs, or more than a sixth of its workforce, in the latest blows to the UK economy and aviation industry dealt by the CCP virus pandemic.
The company, which makes engines for planes such as the Boeing 787 and Airbus 350, said on May 20 it could also close factories as it shrinks to fit the smaller market it expects to emerge from the crisis.
Airlines and their supplies have been among the hardest-hit businesses by lockdowns to contain the pandemic, with passenger air travel grinding to a virtual halt.
Britain, like many other economies, is also bracing for a deep recession, with jobless claims in April leaping to the highest in nearly 24 years.
“We have to reduce our cost base and adapt to the new world, matching our capacity with expected demand,” Rolls-Royce chief executive Warren East told reporters, unveiling the companys biggest round of cuts since privatization in 1987.
The 9,000 jobs, out of a global staff of 52,000, will go predominantly from Rollss civil aerospace business, which generates just over half of its £15 billion ($18 billion) of annual revenues.
Rolls said it was targeting £1.3 billion ($1.6 billion) of annual cost savings, with about £700 million ($856 million) coming from layoffs plus other cuts that could include factory closures.
Headquartered in Derby, central England, about two-thirds of Rolls civil aerospace jobs are based in the United Kingdom, East said, adding that was “probably a good first proxy” of where the jobs were likely to be lost.
East said Rolls had 16 to 17 major civil aerospace manufacturing locations across the world, including big presences in Germany and Singapore.