Flights crisis forces Rolls-Royce to axe 9,000
ROLLS-ROYCE is to cut 9,000 jobs, it announced yesterday.
And it warned it will take “several years” for the airline industry to recover from the pandemic.
It is the latest crushing blow to the aviation industry in the wake of the coronavirus crisis.
The aerospace giant, which has been making aeroplane engines for more than 100 years, announced a major reorganisation of its business.
Now it is feared the move places thousands more jobs at risk in companies that supply the firm with goods and services.
That could trigger mass redundancies across the crisishit industry.
Yesterday, the Derby-based company said it had been forced to take action as demand for aircraft, and the engines it manufactures, has slumped across the world.
Opportunism
UK factories are set to be hardest hit as the firm looks to axe nearly 20 per cent of its 52,000 global workforce.
The company said it will carry out a review of its sites.
Talks will take place with trade unions before any figures for job losses in the UK are agreed.
But last night one union chief accused the company of “shameful opportunism”, saying the measures threatened a return to the “dark days of the Eighties”.
The announcement comes as operators have cut flying hours by 90 per cent and aircraft manufacturers Airbus and Boeing have slashed production numbers.
The Government said it will continue to support the industry during the “challenging” period.
Rolls-Royce, which employs 24,000 staff in the UK including 16,000 aerospace engineers, is aiming to make cost savings of £1.3billion.
Warren East, the company’s chief executive, acknowledged it is “terrible news” for employees, but added that action had to be taken to protect the business in the long term. He said: “This is not a crisis of our making but it is the crisis that we face and we must deal with it.
“Being told that there is no longer a job for you is a terrible prospect and it is especially hard when all of us take so much pride in working for Rolls-Royce.
“But we must take difficult decisions to see our business through these unprecedented times.”
The development comes as air travel has ground to a virtual standstill during the pandemic with airlines around the world announcing drastic job cuts. Analysts said the cuts are likely to send a shudder through Britain’s £36billion-a-year aerospace sector, which employs 111,000 people.
It is estimated that 140 million fewer passengers will take to the air this year, hitting the sector with an estimated £21.1billion in lost revenue.
Britons have been warned against all but essential travel, while the prospect of a compulsory two-week quarantine for people returning to the UK could put even more people off taking off for business or on holiday.
Paul Everitt, chief executive of ADS, the aerospace industry association, called for urgent action by the Government.
He said: “The crisis is having a major impact on aerospace companies who provide high-value, long-term jobs in all regions and nations of the UK, putting thousands more jobs at risk now and in the months ahead.”
Rolls-Royce’s civil aerospace business has 30 sites in the UK including Bristol, Glasgow, and Barnoldswick in Lancashire.
The bulk of the job cuts are expected at the firm’s largest plant in Derby, where workers were said to be shocked at the scale of the cuts. It has
raised fears the firm is planning factory closures, but Rolls-Royce stressed that no decisions have been taken.
The company has furloughed around 4,000 workers in the UK under the Government’s Coronavirus Job Retention Scheme which pays 80 per cent of a worker’s wage up to £2,500 a month.
Steve Turner, assistant general secretary of the Unite union, said: “The news that Rolls-Royce is preparing to throw thousands of skilled, loyal, world-class workers, their families and communities under the bus during the worst public health crisis since 1918 is shameful opportunism.
“This company has accepted public money to furlough thousands of workers.
“Unite and Britain’s taxpayers deserve a more responsible approach to a national emergency. We call upon Rolls-Royce to step back from the brink and work with us on a better way through this crisis.”
The latest overhaul comes on top of measures announced in 2018 to axe around 4,600 jobs to save £400million a year.
Rolls-Royce warned earlier this month that flying hours for its engines dived by 90 per cent in April.
The group had already taken action by slashing its global wage bill by at least 10 per cent, not hiring external candidates, and cutting back on consulting, non-essential travel and subcontractor costs.
Senior management and board pay has been cut by 20 per cent for the rest of the year.
The cuts will mainly affect frontline jobs, but office staff will also be hit, while around half of the total losses will be achieved by the end of the year.