Rolls-Royce to cut 4,600 jobs as part of ma­jor shake-up

The Guardian - - NEWS - Ju­lia Kollewe

Rolls-Royce has an­nounced it is to cut 4,600 jobs as part of a ma­jor shake-up of its busi­ness, mainly af­fect­ing UK man­age­rial and ad­min­is­tra­tive roles.

War­ren East, the air­craft engine maker’s chief ex­ec­u­tive, said Bri­tain would bear the brunt, with around 3,000 of the job losses, and that he could not rule out com­pul­sory re­dun­dan­cies.

“It’s a hor­ri­ble de­ci­sion, never easy,” he said, but added that the cuts were nec­es­sary “if we want to be around for the next 100 years”.

The job losses will fall heav­ily on Derby, the group’s big­gest man­u­fac­tur­ing base in the UK, which has a work­force of 15,700. The firm’s hu­man re­sources, fi­nance, and le­gal de­part­ments are also based in Derby. Some man­age­ment and sup­port jobs in Bris­tol, its sec­ond-big­gest base in the UK, will also go.

While most of the cuts will be in mid­dle man­age­ment jobs, the group said en­gi­neers work­ing on early-stage de­sign would also be laid off as they were not needed at present, but it was still hir­ing en­gi­neers in elec­tri­fi­ca­tion and dig­i­tal­i­sa­tion.

About 1,500 of the jobs will have gone by the end of the year. It is the com­pany’s big­gest round of re­dun­dan­cies since 2001.

In­vestors re­acted pos­i­tively to the an­nounce­ment, with Rolls-Royce’s share price clos­ing up 6.5%, at 883p.

Rolls-Royce said the move would sim­plify the busi­ness into three cus­tomer-fo­cused units with smaller cor­po­rate and sup­port func­tions, and re­duce man­age­ment lay­ers and com­plex­ity, in­clud­ing within en­gi­neer­ing.

The com­pany is also ramp­ing up pro­duc­tion and hopes to be mak­ing 600 en­gines a year for wide-body air­craft by 2020, twice as many as five years ago.

Rolls-Royce em­ploys about 55,000 peo­ple world­wide. It has a work­force of 26,000 in the UK, which in­cludes con­trac­tors.

Bri­tain’s big­gest union, Unite, warned Rolls-Royce against cut­ting “too deep and too fast”.

Steve Turner, Unite’s as­sis­tant gen­eral sec­re­tary for aerospace, said: “This an­nounce­ment will be deeply unset­tling for Rolls-Royce work­ers and their fam­i­lies and could have a dire eco­nomic im­pact on lo­cal com­mu­ni­ties re­liant on Rolls-Royce jobs.”

East, who took the helm three years ago, ex­pressed frus­tra­tion at the pace of change at the busi­ness, and said: “We must create a com­mer­cial or­gan­i­sa­tion that is as world-lead­ing as our tech­nolo­gies. We need to mod­ernise the way in which we do busi­ness.”

The 33,000 non-man­u­fac­tur­ing staff were “too many for a busi­ness of our size”, he said.

This week, Rolls-Royce re­vealed that it had dis­cov­ered new prob­lems with its trou­bled Trent 1000 en­gines, which power Boe­ing’s 787 Dream­liner air­craft.

More than 30 air­craft have been grounded, and an­a­lysts reckon the bill for fix­ing the prob­lems and com­pen­sat­ing air­lines could reach £1bn.

The firm said it would stand by a deal made with the unions a year ago that will pro­tect 7,000 en­gi­neer­ing jobs in the east Mid­lands – Derby, Huck­nall and An­nes­ley – as part of a £150m in­vest­ment.

Unite said the col­lec­tive agree­ment in­cluded a guar­an­tee against com­pul­sory re­dun­dan­cies, and that it would be seek­ing a sim­i­lar guar­an­tee for its mem­bers af­fected by yes­ter­day’s an­nounce­ment who were not cov­ered by that agree­ment.

MAIN PHO­TO­GRAPH: ROLLS-ROYCE

Rolls-Royce says it has found new prob­lems with its Trent 1000 engine. Be­low left, a worker in Derby in 1947

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