Rolls-Royce is cutting at least 9,000 jobs as part of what the company called a “major reorganization” of its business to address medium-term structural changes brought on by the COVID-19 pandemic, which has dramatically reduced customer demand.
“We have already taken action to strengthen the financial resilience of our business and reduce our cash expenditure in 2020,” the company said in a statement. “It is, however, increasingly clear that activity in the commercial aerospace market will take several years to return to the levels seen just a few months ago.”
Chief executive officer Warren East said most of the cuts will come in the civil aerospace division, which makes engines for Boeing and Airbus. The division accounted for more than half of its revenue last year.
East said the need for the cuts was based on a projection that the wide-body market would decrease by about one-third this year versus 2019 and would take up to five years to recover.
Rolls-Royce said its defense business has been “robust” during the pandemic. That business’s outlook is unchanged and no reduction in headcount is needed.
Steve Turner, an official with the U.K. labor union Unite, called the job cuts “shameful opportunism.”
“This company has accepted public money to furlough thousands of workers. Unite and Britain’s taxpayers deserve a more responsible approach to a national emergency,” Turner said.
“We’re very grateful for the help that the [UK] government has provided to help us through the immediate trough… but no government can extend things like furlough schemes for many years into the future,” East said.
Rolls-Royce, based in Derby, England, employs 52,000 around the world. The union said it expected 3,375 of the job cuts would be in the U.K.
General Electric’s jet engine business, GE Aviation, has said it will permanently reduce its global workforce by as much as 25% this year.
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