(qlmbusinessnews.com Tues, 17th Oct, 2023) London, UK —
Rolls-Royce Announces Upcoming Job Cuts as Part of Long-Term Strategy Reveal
Rolls-Royce, the iconic jet engine manufacturer, is set to cut between 2,000 and 2,500 jobs across its business, with an announcement expected on Tuesday. Tufan Erginbilgiç, who assumed the role of CEO in January, is poised to unveil his long-term strategy for the company.
Erginbilgiç's reference to Rolls-Royce as a “burning platform” upon taking office indicated substantial changes to reposition this historic British manufacturer among its competitors.
While Rolls-Royce's financial performance improved over the past year, driven by the resurgence of global air travel after the pandemic, the focus on long-haul travel caused it to lag behind companies specializing in engines for short-haul planes. The share price doubled in 2023, albeit remaining below pre-pandemic levels in 2019.
The pandemic's impact on global travel significantly affected the company's civil aviation revenues, compelling it to reduce costs by cutting 9,000 jobs. Government officials were informed of the latest redundancy plans, in accordance with statutory requirements regarding job cuts.
Erginbilgiç had previously highlighted the duplication of work in different areas of the business. The upcoming job cuts are expected to affect back-office roles rather than engineers working directly with technology.
Rolls-Royce, with around 42,000 employees, is poised to trim its workforce, with about half of its employees in the UK. The company is yet to disclose the exact number of jobs to be affected.
The company has three primary divisions: civil aerospace, defence, and power systems. Analysts have identified the power systems unit as particularly vulnerable due to high costs relative to performance. The CEO intends to integrate this division more closely into the broader company.
Erginbilgiç plans to provide investors with an update on his vision for Rolls-Royce in the coming month. This forthcoming announcement includes medium-term targets for sales and profits, information that has been withheld while the CEO reviewed the company's strategy.
Rolls-Royce has refrained from commenting on the job cuts.
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