Rolls-Royce, the renowned engineering giant, has announced its intention to eliminate up to 2,500 positions worldwide. This decision is part of the company's broader strategy to establish a "more efficient and effective" organization.
The announcement marks the first major initiative by Tufan Erginbilgic since he assumed the role of chief executive in January. Upon taking the helm, Erginbilgic characterized Rolls-Royce as a "burning platform," signaling the urgency of the company's situation. The Derby-based firm, known for its aircraft engine manufacturing, employs approximately 42,000 individuals globally. Roughly half of this workforce is stationed in the UK.
The aviation industry, including Rolls-Royce, faced unprecedented challenges during the COVID-19 pandemic, with air travel coming to a near standstill for extended periods. Although the company refrained from specifying where the job reductions would occur, there are indications that several back-office roles in the UK might be impacted.
Sharon Graham, the general secretary of the Unite union, expressed concern over the manner in which the announcement was made, noting that the union only became aware of the impending cuts through media reports. She emphasized the need for direct engagement with the company to ensure the well-being of its members.
Rolls-Royce's operations span multiple locations, including Derby, Bristol, Lancashire, Glasgow, Tyne & Wear, and Rotherham. It's anticipated that the company's submarines division in Derby, which is supported by the Ministry of Defence and employs 3,600 individuals, will remain unaffected by the proposed job cuts. Similarly, the Small Modular Reactor nuclear program, a collaborative effort with partners in Qatar and the US, is expected to continue without interruption.
However, the company's presence in Germany, where it employs 11,000 people, might experience significant disruptions, especially the Power Systems engine-building operation located in the southern part of the country.
Rolls-Royce's restructuring aims to eliminate redundancies and achieve cost efficiencies. "We are building a Rolls-Royce that is fit for the future," Erginbilgic stated, emphasizing the need for a leaner and more agile organization that can effectively serve its customers, partners, and shareholders.
The company faced considerable financial strain during the pandemic, prompting it to secure billions in funding to sustain operations. In 2020, it reduced its workforce by 9,000 positions. As part of the new restructuring plan, Rolls-Royce will consolidate its engineering, technology, and safety teams. Chief Technology Officer Grazia Vittadini will be stepping down as these changes take effect. The company also plans to enhance its procurement and supply chain management processes and integrate its finance, legal, and human resources teams across the organization.
Erginbilgic, who previously served at oil giant BP, has been candid about the company's challenges, describing its performance as "unsustainable." With these new changes, he envisions a transformed Rolls-Royce that is competitive, resilient, and poised for growth.
