Rolls-Royce to cut 2,000 jobs worldwide

Rolls-Royce, the United Kingdom-based manufacturer of aircraft engines, has announced that it is planning to reduce its global workforce by up to 2,000 “to cope with the global downturn and delays to the Boeing 787 and the Airbus A380.”

Sir John Rose, chief executive of Rolls-Royce, said in a statement: “We wanted to give all our employees an early indication of the likely scale of the job reductions we expect in 2009.”

The proposed jobs cuts will be made across the group, which employs 39,000 people worldwide.

Rolls-Royce employs 22,100 people – or, 60% of the total – in the United Kingdom. About 140 posts will be eliminated the company’s jet-engine assembly and test facility unit in Derby.

As many as 12,500 people work in the Derby facility, and many of these work in the group’s civil aerospace business, building engines for the world’s big airlines.

Rolls-Royce is the second-largest maker of aircraft engines in the world, behind GE Aviation. (GE Aviation, a subsidiary of General Electric, is headquartered in Evendale, Ohio, the United States). Rolls-Royce, which has related businesses in the fields of defence aerospace, marine and energy, was nationalised in 1971, by which time aircraft engines had long been the most significant part of the business. The automobile company was separated in 1973, and the present Rolls-Royce plc was re-privatised in 1987. Rolls-Royce, through its defence aerospace division, is the world’s 16th largest defence contractor.

Rolls-Royce gets 80% of its revenue from the civil aviation market and 20% from military work. Its heavy overhaul and maintenance operations extend from Europe to the Americas and Asia. It also has a big marine and industrial turbine business.

Rolls-Royce competes with GE Aviation and Pratt & Whitney in providing engines in to the Airbus A380 Superjumbo, the world’s largest passenger aircraft, and the Boeing 787 Dreamliner and many smaller aircraft, including business jets. Its engines also power Bombardier’s Global Express business jets.

In the statement, Rolls-Royce explained its stand thus: “Rolls-Royce has looked at the potential impact of the global downturn as well as delays to the Airbus A380 and the Boeing 787, for which it supplies engines. While it is too early to be specific about the precise implications for the number and location of job losses, the group’s current assessment is that in 2009 it will be necessary to implement job reductions across the various sections and functions of around 1,500 to 2,000 on a worldwide basis, including the reduction announced on November 21, 2008.”

Bernie Hamilton, of the Unite trade union, was quoted by the website dailymail.co.uk as saying: “The announcement of job cuts by Rolls-Royce is bitterly disappointing. Rolls-Royce must take a measured approach. In the past, the company has cut too many jobs and struggled to meet the upturn in the market. Unite is urging the government to use the pre-budget report to support UK manufacturing and encourage companies to retain workers so that when market conditions improve, a skill shortage is not the outcome.”

The latest round of job cuts by Rolls-Royce come on top of the 2,300 office jobs that were axed in January 2008.