Coronavirus: Rolls-Royce to cut 9,000 jobs amid COVID-19 crisis
'We expect the loss of at least 9,000 roles from our global workforce of 52,000,' said Rolls-Royce amid the coronavirus (COVID-19) health crisis
FollowLondon: British aircraft engine-maker, Rolls-Royce, on Wednesday (May 20) said it would cut 9,000 jobs globally due to the impact on the aviation industry amid the coronavirus (COVID-19) crisis.
Also read: International tourism could suffer $1.2 trillion loss, says UNWTO
“The impact of COVID-19 on Rolls-Royce and the whole of the aviation industry is unprecedented. We have already taken action to strengthen the financial resilience of our business and reduce our cash expenditure in 2020. It is, however, increasingly clear that activity in the commercial aerospace market will take several years to return to the levels seen just a few months ago,” the company stated in a press release.
Photos: Planes remain grounded at airports around the world
Rolls-Royce said, “We are proposing a major reorganisation of our business to adapt to the new level of demand we are seeing from customers. As a result, we expect the loss of at least 9,000 roles from our global workforce of 52,000. In addition to the savings generated from this headcount reduction, we will also cut expenditure across plant and property, capital and other indirect cost areas. The proposed reorganisation is expected to generate annualised savings of more than £1.3bn, of which we expect headcount to contribute around £700m. The cash restructuring costs related to these actions are likely to be around £800m, with outflows incurred across 2020 to 2022.”
Also read: 'This virus may never go away', says WHO
Rolls-Royce CEO Warren East
Rolls-Royce CEO Warren East said the current crisis is “not a crisis of our making” and said they had to take “difficult decisions” in these “unprecedented times”.
“This is not a crisis of our making. But it is the crisis that we face and we must deal with it. Our airline customers and airframe partners are having to adapt and so must we. 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,” Warren said.
Warren added, “The strategic choices that we have made over the last few years have helped us to respond rapidly to COVID-19 and the synergies between our divisions leave us well placed to capitalise on the long-term potential of our markets. The world on the other side of this pandemic will need the power that we generate to fuel economic recovery.
“I absolutely believe the call for that power to be more sustainable will be stronger than ever. This plays to our strengths. We must ensure that we are able to continue to innovate and play our leading role in enabling the vital sectors in which we operate achieve net zero carbon emissions. We have emerged from troubled times before, to achieve incredible things. We will do so again.”
Rolls-Royce, based in Derby, United Kingdom (UK), said it has customers in more than 150 countries, comprising more than 400 airlines and leasing customers, 160 armed forces, 70 navies, and more than 5,000 power and nuclear customers.
Due to the coronavirus crisis, commercial flights around the world have been grounded. Most of the countries still remain under a lockdown.
The current crisis could lead to a revenue loss of US$910 billion to US$1.2 trillion with an annual decline of 60% to 80% in international tourism, according to United Nations World Tourism Organization (UNWTO).
