No change on staff cuts

Aero engine maker Rolls-Royce hits UK jobs cull target

Rolls Royce Inchinnan

Rolls-Royce Inchinnan will lose 700 workers

Aerospace engineer Rolls-Royce is sticking to its planned job cuts and says it has received more than 3,000 expressions of interest for voluntary severance in the UK, equal to the number of redundancies being sought.

Approximately two-thirds of these are expected to leave by the end of August.

The company says it needs to axe 9,000 posts worldwide (17% of total workforce), including 700 at its plant at Inchinnan, near Glasgow, as a result of a collapse of orders in the industry.

It said its major reorganisation to right-size the group, announced on 20 May, “is progressing well and is forecast to deliver at least £1.3 billion in annual pre-tax cash savings by the end of 2022.”

Widebody engine flying hours are forecast to fall by about 55% this year, with more long-haul routes opening up in the fourth quarter.

“We continue to plan for about 250 widebody engine deliveries in 2020, based on announced build rates from our airframer customers.

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“As a result of our cash mitigation actions and supply chain management we expect our rate of cash consumption to significantly reduce in the coming months, resulting in a full year free cash outflow of approximately £4 billion.

“We remain positive about the long-term outlook for sustainable power solutions. We expect Defence to continue to experience good demand.

“In Power Systems, many of our impacted end markets are forecast to recover by the end of 2021. We currently expect our widebody engine flying hours to recover to approximately 70% of 2019 levels in 2021.”

Warren East, CEO, said: “These are exceptional times. The COVID-19 pandemic has created a historic shock in civil aviation which will take several years to recover.

“We started this year with positive momentum and strong liquidity and acted swiftly to conserve cash and cut costs to protect Rolls-Royce during the pandemic.


The company has seen a downturn in orders

“We are taking steps to resize our Civil Aerospace business to adapt to lower medium-term demand from customers and help secure our future.

“This means we have had to take the very difficult decision to lose people who have helped us become the company we are and who have been proud to work for Rolls-Royce.

“It is my first priority to treat everyone – whether they are leaving or staying – with dignity and respect.

“We will take the lessons of how we have dealt with this unprecedented challenge with us and position ourselves to emerge as an even stronger company in the future.”

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