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Rolls-Royce sharpens its axe, targets 2,500 job cuts to cut cost

Rolls-Royce recently unveiled its strategy to reduce its global workforce by up to 2,500 employees as part of an initiative to enhance operational efficiency and effectiveness.

This marks a significant move under the leadership of Tufan Erginbilgic, who assumed the role of chief executive in January. On taking the helm, he characterised Rolls-Royce as being on a “burning platform.”

The company, renowned for producing aircraft engines, is headquartered in Derby and boasts a workforce of approximately 42,000 individuals across the globe, with roughly half of them based in the United Kingdom.

The aviation industry was severely impacted by the COVID-19 pandemic, resulting in substantial challenges for Rolls-Royce.

While the specific details regarding the locations of job reductions were not disclosed, reports indicate that a substantial portion of these cuts will affect back-office positions in the UK.

Rolls-Royce has expressed its intention to engage with labour unions before making any further announcements.

Sharon Graham, the general secretary of Unite, expressed discontent, stating that the union only learned about the job cuts through the media and that Rolls-Royce employees would need to wait another three months to ascertain the security of their positions.

Read also:Rolls Royce records highest sales in history amid pandemic recovery

“This announcement appears to be about appeasing the markets and its shareholders while ignoring its workers. Attempting to bypass unions will not be allowed,” she said.

“This approach only serves to create more stress and uncertainty and Unite will be seeking reassurances on jobs.”

Rolls-Royce has a substantial presence in various UK locations, including 13,700 employees in Derby, 3,400 in Bristol, and smaller bases in Lancashire, Glasgow.

However, operations in Germany, where Rolls-Royce employs 11,000 individuals, are anticipated to be significantly impacted, particularly the Power Systems engine-building operation in the southern region of the country.

Rolls-Royce has stated that these planned changes are aimed at eliminating redundancy and delivering cost-efficiency.

Erginbilgic, the company’s CEO, emphasised their commitment to building a more streamlined and efficient organisation that can better serve customers, partners, and shareholders.

The company faced substantial challenges during the COVID-19 pandemic, leading to the need to raise significant capital to sustain its business. In 2020, Rolls-Royce had already reduced its workforce by 9,000 positions.

Erginbilgic described these changes as another step in the company’s multi-year transformation journey to construct a high-performing, competitive, resilient, and growing Rolls-Royce.

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