Rolls set to axe 1 in 4 jobs at historic base

White-collar cull will see 4,000 staff axed this week

ROLLS-Royce is poised to axe 4,000 jobs as part of its brutal overhaul to rein in costs.

The cull of managers and administrative staff is expected to be announced at a meeting on Friday, when boss Warren East will speak to investors.

Hardest hit will be the engineering giant’s base in Derby where most of its white-collar staff are located.

Rolls has been based in Derby since 1906. About 14,000 of the group’s staff work there, meaning the cuts could wipe out a quarter of the local workforce. It will not affect some 7,000 frontline engineers, however, who are protected under a deal with unions.

The cuts would be some of the most severe announced so far by East, who has slashed about 5,500 jobs since taking over in 2015.

He brought in advisers at Alvarez & Marsal to help the restructuring, which includes plans to sell its marine arm and focus on the three divisions of civil aerospace, defence and power.

Rolls is also set to quit its plush London HQ in Buckingham Gate, with East saying it is looking for a smaller and less-expensive site.

JP Morgan analysts believe the firm will seek cuts of up to 10pc of the 50,000 workforce this week, although the actual figure is not expected to be that high. They reduction could net £200m in cost savings, they added.

Yesterday union bosses and MPs reacted to the suggestion with surprise and dismay.

Tony Tinley, Unite’s regional officer, said: ‘It is not something I have been made aware of. At the moment this is pure speculation.’

Labour’s Chris Williamson, MP for Derby North, said such reductions would be a major step up from previous job cuts. ‘This is the first I have heard of it,’ he added.

Meanwhile, Rolls is grappling with problems with its flagship Trent 1000 Package C aeroplane engines. It has ramped up inspections around the world amid concerns they are deteriorating faster than expected.

The Trent engines are used in Boeing 787 Dreamliner planes and some have been grounded because of the problem, which could take up to four years and cost around £750m to fix.

It is understood that upcoming job cuts at the company are not connected to the issue.

Last night a Rolls-Royce spokesman said: ‘ In January, we announced a simplification of our business and began work on a restructuring of our support and management functions.

‘We added at the time of our annual results in March that we would focus on operational restructuring of management, support and engineering and technology functions across the corporate centre and also in our three divisions: civil aerospace, defence and power, and systems.

‘We are proposing to move to a considerably simplified staff structure, with fewer layers and greater spans of control across the group. We said we had retained restructuring experts Alvarez & Marsal to support us.

‘We added that we expected this programme to deliver a significant reduction in costs and assist us in improving performance across the group as a whole, and that we would provide clarity of these benefits at an event for financial analysts and investors on June 15. We are not commenting on current media speculation about the potential impact.’