Rolls-Royce, the maker of aircraft engines, said on Tuesday it would shed 2,600 jobs, mainly at its aerospace division, over the next 18 months.
Sky sources say the job losses are due to general market conditions and are part of a series of cost cutting measures.
On October 17, Rolls-Royce warned that its profit would not rise next year, due to deteriorating economic conditions. At the time, the company’s share decreased by 16 percent.
“The measures announced today will contribute towards Rolls-Royce becoming a stronger and more profitable company,” John Rishton, chief executive of Rolls-Royce said. “We will work to achieve the necessary reductions on a voluntary basis where possible, while making sure we retain the skills needed for the future.”
Rolls-Royce said the job losses would cost the company £120m over the next two years, but would bring “annual cost benefits” of £80m once implemented.
Rolls-Royce said in October that the market for its main aircraft engine business would strengthen. However, customers in the oil and gas, mining, construction, industrial and agricultural sectors were canceling or delaying orders.
Over 55,000 people in 45 countries work for Rolls-Royce. So these 2,600 dismissals may become just a beginning.
Xavier Collin, IEJ3F