Rolls-Royce, a company that manufactures aircraft engines, has announced plans to cut up to 2,500 jobs globally in an effort to make the organisation more efficient and effective. This decision comes shortly after Tufan Erginbilgic took over as the CEO of Rolls-Royce in January, describing the company as a “burning platform.” The company, headquartered in Derby, UK, employs approximately 42,000 people worldwide, with about half of its workforce based in the UK.
The aviation industry, including Rolls-Royce, was severely impacted by the COVID-19 pandemic, with a significant reduction in air travel, leading to financial challenges for the company. While the announcement did not specify the exact locations of the job cuts, it is reported that a significant number of back-office positions in the UK may be affected. Rolls-Royce intends to engage with labor unions before providing further details.
Unite, a labor union, expressed concern about the lack of consultation with employees and emphasised that bypassing unions will not be allowed. The union called for reassurances regarding job security. Rolls-Royce’s submarine division in Derby and its Small Modular Reactor nuclear program are expected to be unaffected by the cuts.
Operations in Germany, where Rolls-Royce employs around 11,000 people, are expected to be significantly impacted, particularly in the Power Systems engine-building division in the south of the country. Rolls-Royce has stated that these changes are aimed at removing duplication and delivering cost efficiencies.
The company is looking to streamline its organisation by merging its engineering technology and safety teams. It also plans to cut costs through improved procurement and supply chain management processes and will consolidate its finance, legal, and human resources teams across the group.
Tufan Erginbilgic emphasised that these changes are part of a broader transformation journey to build a more competitive, resilient, and growing Rolls-Royce, following the company’s financial challenges during the pandemic. In 2020, Rolls-Royce had previously cut 9,000 jobs as part of cost-saving measures.