RollsRoyce to slash thousands of jobs
Rolls-Royce Holdings Plc will eliminate 8% of its workforce in chief executive officer Warren East’s biggest step yet to overhaul the UK jet-engine manufacturer and save more than half a billion dollars a year.
The shares jumped after London-based Rolls said about one-third of the 4,600 staff cuts will occur by the end of this year. Rolls is seeking to save £400 million ($533 million) annually by the end of 2020, the company said in a statement Thursday, confirming a Bloomberg News report.
The latest retrenchment by East, who took charge in 2015, extends the total jobs eliminated under his leadership to about 10,000. The former head of semiconductor developer ARM Holdings Plc has been working to simplify Rolls’s convoluted structure and improve earnings visibility since taking charge of the manufacturing behemoth. The executive, 56, has been frustrated by the slow pace of change and inability to respond to shifts in demand in core markets.
“We have made progress in improving our day-to-day operations and strengthening our leadership, and are now turning to reduce the complexity that often slows us down,” East said in the statement. “We are fundamentally changing how we work.”
Rolls advanced as much as 4.2% in early London trading. The stock is little changed this year.
Most of the job losses will take place in the UK, where 26,000 of the company’s 55,000 workforce is based.
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