Rolls-Royce, the British aircraft engine manufacturer, on Wednesday announced that it would cut at least 9,000 jobs and reduce costs in other parts of its business, as the coronavirus crisis shows no signs of let-up and pummels the aviation industry.
Rolls-Royce disclosed it that was aiming for 1.3 billion pounds in yearly cost savings to survive the prolonged crisis caused by the Covid-19 pandemic that has forced many airline companies to park their jets. Cuts in workforce will comprise for around 50 percent of the company's savings goal.
In a statement released Wednesday, the engine giant said they are working on a critical restructuring program so it could adapt to the new degree of demand many other aircraft engine makers are witnessing from clients. As a result, Rolls-Royce disclosed it was anticipating cutting around 9,000 job positions from the company's headcount of 52,000 around the world.
The British multinational engineering company said the termination of almost one-fifth of the company's personnel would primarily have a significant impact on its civil aerospace unit. A huge volume of the job reductions are seen to be at its site in Derby in the United Kingdom.
"This is not a crisis of our making. But it is the crisis we face and must deal with it," chief executive Warren East said, as quoted by Agence France Presse in a report Wednesday.
Labor unions stated that they anticipate a large portion of the job cuts to take place in the UK, while market planners said the immediate impact for supply chains meant a lot of other employees working in different areas of the aerospace industry were poised to become unemployed.
Rolls-Royce also manufactures combat aircraft and ship engines, including reactors for nuclear attack submarines, but the group stressed no employee would be rendered jobless at its defence division. Rolls-Royce's civil aerospace division has around 16,000 people under its payroll in the UK.
Given the current state of the world's economy reeling from the ill effects of the coronavirus crisis, Rolls-Royce said it would take many years for the commercial aerospace industry to come back to levels seen just a couple of months earlier, and the group said it must adjust its capability to deal with the falling demand.
Rolls-Royce had initially furloughed 4,000 employees in the UK in April this year. Around 3,700 personnel remain on the Coronavirus Job Retention Scheme through which the federal government compensates 80 percent of an employee's salary up to 2,500 pounds per month.
