Rolls-Royce is set to cut over 5,500 jobs after the year, ahead of its prior expectation of 5,000.
The major reorganisation programme has come as a result of the reduction in interest in the company’s Civil Aerospace services and products in the pandemic. Rolls-Royce expects it will take several years to recover from COVID-19’s impact.
In a trading update released today (11 November) the Derby firm said it had made good progress towards its target for £1.3 billion of pre-tax cash cost savings and a reduction of at least 9,000 roles after 2022.
Rolls-Royce is also currently in consultation regarding the next phase of its Civil Aerospace footprint review, with a proposal to transfer its facility and workforce in Hucknall, UK, which manufactures a range of aero-engine parts, into ITP Aero. The company can also be proposing to consolidate the manufacture of aero-engine structures into ITP Aero and is planning to sell ITP Aero.
Rolls-Royce said that its mitigating actions to preserve money in 2021 are on track to deliver a lot more than £1 billion of in-year savings in 2021.
Warren East, CEO, said: “We've taken decisive actions to safeguard and reposition our business in difficult and uncertain trading conditions, such as the impact from a second wave of COVID-19.
“We've made rapid progress on our restructuring programme and also the consolidation and reorganisation of our Civil Aerospace footprint is well underway. Our £5 billion recapitalisation package in November was well supported and it has increased our resilience and strengthened our balance sheet.
“The outlook remains challenging and also the pace and timing from the recovery is uncertain. However, our actions have given us a strong foundation to deliver better returns as our end markets improve and that we continue to drive our ambition of delivering more sustainable capacity to support the creation of a net zero carbon economy.”