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Rolls-Royce considering cutting up to 15% of its workforce – source

imageStock Markets14 hours ago (May 01, 2020 08:05PM ET)

(C) Reuters. FILE PHOTO: File photo of an Airbus A350 with a Rolls-Royce logo at the Airbus headquarters in Toulouse

By Aishwarya Nair and Maria Ponnezhath

(Reuters) – British aero-engine maker Rolls-Royce Holdings (L:RR) is considering cutting up to 15% of its workforce, a source close to the company told Reuters, as customers cut production and airlines park planes due to the coronavirus pandemic.

The size of layoffs has been mentioned internally by senior management, but is by no means finalised and there is a lot of negotiation still to be done, the source added.

The company’s engines power Airbus SE (PA:AIR) and Boeing Co ‘s (N:BA) widebody jets and Rolls-Royce is paid by airlines based on how many hours its engines fly.

The Financial Times earlier reported Rolls-Royce was preparing to lay off up to 8,000 of its 52,000-strong workforce.

An announcement on the final figure is not expected before the end of May, when the company will update employees, according to the FT report. (https://on.ft.com/2VSaQfD)

Last month, Rolls-Royce scrapped its targets and final dividend to shore up its finances to cope with the virus outbreak.

The company’s Chief Executive Officer Warren East said in April Rolls-Royce would be looking at cutting cash expenditure, including salary costs across its global workforce by at least 10% this year.

Discussions with unions about the job cuts have just begun, the newspaper reported, citing sources.

The scale of job cuts is still likely to be larger than after 9/11 when the group cut 5,000 jobs and the vast majority of it is expected to hit the civil aerospace unit, the FT said.

While job losses are also expected in the unit’s operations in Singapore and Germany, Britain’s civil aerospace workforce is expected to bear the majority of the cuts, according to the report.

Unite, Britain’s largest trade union, did not comment in response to a query from Reuters.

Rolls-Royce considering cutting up to 15% of its workforce – source

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