Rolls-Royce, a UK aircraft engine manufacturer, is planning to cut at least 9,000 jobs, due to falling demand for civil aerospace engines amid the coronavirus pandemic.
The number of jobs to be cut represents 17.3 per cent of the company’s global workforce, the company said in a statement on Wednesday.
According to the manufacturer, such measures are being taken due to the “unprecedented” impact of COVID-19 on the whole aviation industry, and it will take several years to restore demand to the levels seen a few months ago.
“We are proposing a major reorganisation of our business to adapt to the new level of demand we are seeing from customers.
“As a result, we expect the loss of at least 9,000 roles from our global workforce of 52,000,” the company said.
In addition, the company will cut expenditures associated with the maintenance of plants and property, capital and other indirect costs.
The cost-cutting, the company further said, is expected to generate an annual savings of more than 1.3 billion pounds ($1.6 billion), with 700 million pounds aimed at covering headcount costs.
“Governments across the world are doing what they can to assist businesses in the short-term, but we must respond to market conditions for the medium-term until the world of aviation is flying again at scale.
“And governments cannot replace sustainable customer demand that is simply not there,” Rolls-Royce CEO Warren East said, as quoted in the statement.
Rolls-Royce started a large-scale reorganisation back in June 2018 in order to reduce costs and increase the financial stability of the company.
In particular, the manufacturer cut 4,600 jobs amid declining demand in the oil and gas market.
By the end of 2020, Rolls-Royce intended to reduce costs by 400 million pounds per year.
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