Rolls-Royce has announced it is to cut 4,600 jobs as part of a major shakeup of its business, mainly affecting managerial and administrative roles in the UK.
The job losses will fall heavily on Derby, the group’s biggest manufacturing base in the UK, which currently has a workforce of 15,700 people. The aircraft engine maker’s HR, finance, and legal departments are also based in Derby. Some corporate and support jobs in Bristol will also be affected.
While most of the cuts will be in middle management jobs, engineers working on early-stage design will also be laid off as they are not needed at present, the group said. Rolls-Royce said it was still hiring engineers in electrification and digitalisation.
Approximately 1,500 of the jobs will be axed by the end of the year. Rolls-Royce said the move would simplify the business into three customer-focused units with smaller corporate and support functions and reduce management layers and complexity, including within engineering.
The company employs 55,000 people worldwide. It has a workforce of 26,000 in the UK, which includes contractors. Its headquarters in London employs 200 people.
Britain’s biggest union, Unite, warned Rolls-Royce against cutting “too deep and too fast”.
Its assistant general secretary for aerospace, Steve Turner, said: “This announcement will be deeply unsettling for Rolls-Royce workers and their families and could have a dire economic impact on local communities reliant on Rolls-Royce jobs.
The Rolls-Royce chief executive, Warren East, said: “We have made progress in improving our day-to-day operations and strengthening our leadership, and are now turning to reduce the complexity that often slows us down and leads to duplication of effort.
“It is never an easy decision to reduce our workforce, but we must create a commercial organisation that is as world-leading as our technologies. To do this we are fundamentally changing how we work.”
This week, Rolls-Royce said it had discovered new problems with its troubled Trent 1000 engines, which power Boeing’s 787 Dreamliner aircraft, triggering fresh safety fears and potential disruption for airlines including British Airways and Norwegian.
The firm said it would stand by a deal made with the unions a year ago that will protect 7,000 engineering jobs in the east Midlands, mainly Derby, as part of a £150m investment.
Unite said the collective agreement included a guarantee against compulsory redundancies, and that it would be seeking a similar guarantee for its members affected by Thursday’s announcement who were not covered by that agreement.
The redundancies and other restructuring costs are expected to reach £500m, but would save £400m annually by 2020.