Rolls-Royce nears end of jobs cull with 8,500 roles axed out of a planned 9,000 as firm continues restructure to save £1.3billion by end of 2022
- British automotive giant has parted with thousands of staff in cash-cutting bid
- Rolls’ dramatic restructure plans announced last summer are nearing an end
- 8,500 jobs have already been lost as firm set to save £1.3billion by end of 2022
Rolls-Royce has announced almost 8,500 roles will be axed by the end of 2021 as the company nears the end of its planned job cuts that were announced 19 months ago.
The British automotive giant has already parted ways with thousands of staff in a desperate cash-cutting bid to save around £1.3billion by the end of next year.
‘The pace of restructuring (is) running ahead of our original plan and footprint rationalisation continuing through the second half of the year,’ the business said on Thursday.
At one point, Rolls-Royce’s cashburn was reaching £1 billion per quarter as its engine construction arm for aeroplanes, jets, submarines and more was crippled by the pandemic’s lockdowns.
Other parts of the business, including its power systems and defence units, have shown more reason for shareholders to be cheerful.
Yet they did not immediately reward the company. Its stock prices slipped 3.8% to 124.6p per share at the start of Thursday trading after the news was shared.
Rolls-Royce has announced almost 8,500 roles will be axed by the end of 2021 as the company nears the end of its planned job cuts that were announced 19 months ago. Pictured: The firm’s Derbyshire plant
At one point, Rolls-Royce’s cashburn was reaching £1 billion per quarter as its engine construction arm for aeroplanes, jets, submarines and more was crippled by the pandemic’s lockdowns
The engineering giant said its improved trading performance drove a return to positive free cash flow in the third quarter and reduced the outflow expected in the second half.
But for a business as focused on aviation as Rolls-Royce, many of the things that matter to the company have been far outside its control during the pandemic.
One of the key figures that the business tracks is how long its plane engines spend in the sky.
Historically, the civil aviation industry has fuelled more than half of the company’s £15billion in annual revenue.
But with the onset of the Covid pandemic, and global non-essential travel being heavily restricted by lockdowns, Rolls-Royce has faced unprecedented challenges.
Chief executive Warren East said: ‘We have achieved good results with our fundamental restructuring programme, as we sustainably reduce costs and deliver a leaner and more efficient company, and are firmly on course to complete our disposals programme.
‘We are delivering on the elements within our control and are focused on our commitments.’
Mr East has previously said he did not expect the company to fully recover from the crisis until around 2025.
Rolls-Royce makes a loss when it sells the engines, but has long-term servicing contracts on them for which it is paid by the amount of time they spend flying.
At the moment, while they have been slowly rising, large engine flying hours are still half what they were in 2019.
Rolls-Royce chief executive Warren East (pictured) has previously said he did not expect the company to fully recover from the crisis until around 2025
‘Large engine flying hours have continued to recover gradually, helped by the reopening of certain key travel corridors, especially the trans-Atlantic routes,’ the business said.
‘The pace of travel recovery remains uneven as countries around the world look to manage the ongoing challenges of the Covid-19 pandemic.’
Other parts of the business, including its power systems and defence units, have shown more reason for shareholders to be cheerful.
Yet they did not reward the company on Thursday. Shares dipped 3.8% after the news.
The business also said its new all-electric plane is the world’s fastest, hitting speeds of 345mph – more than 100mph quicker than its closest rival.
‘We are investing in the net-zero technologies and solutions that we need across the group to grasp the tremendous commercial opportunity of the global energy transition and drive long-term value,’ Mr East said.
‘This all underpins our strategy of creating a better quality and more balanced business which can deliver significantly improved returns and cash flow into the future.’
Source: Read Full Article
