“Rolls-Royce” she announced to cut about 4,600 jobs as part of a major reorganization of its business, primarily affecting managerial and administrative roles in the UK.
Warren East, chief Executive of the aircraft engine maker, said that the UK will suffer with some 3,000 job losses, and that he could not rule out compulsory job cuts.
“It’s a terrible decision, is never easy”, he said, but that the cuts were necessary “if we want to be around for the next 100 years.”
Job losses will be much to fall on Derby, the largest production base of the group in the UK, which currently has 15,700. The firm’s HR, Finance, legal departments in Derby. Some corporate and support jobs in Bristol, the second-largest database in the UK, too.
While most of the reductions will average jobs management, engineers working on the early stages of design will also be dismissed, as they are not needed at the present time, said in the group. Rolls-Royce said it is still hiring engineers for electrification and digitalization.
About 1,500 jobs will be fired before the end of the year. This is the biggest round of company layoffs since 2001.
Rolls-Royce said that this step will simplify the businesses into three customer-oriented divisions with smaller corporate and support functions and reducing layers of management and complexity, including in engineering. At the same time it is ramping up production and hopes that the 600 engines for wide-body aircraft per year by 2020, more than double five years ago.
The company employs 55,000 people worldwide. It employs 26,000 people in the UK, which includes manufacturing.
The largest British Union, unite, warned rolls-Royce against cutting “too deeply and too quickly”.
His assistant NATO Secretary General for the aerospace, Steve Turner, said: “this announcement is very worrying for rolls-Royce workers and their families and can have severe economic consequences for local communities related to “rolls Royce” jobs”.
East, who took the helm three years ago, expressed disappointment about the pace of change in the business, and said, “We need to establish a commercial organization that is a world leader as our technology. We need to modernize the way we do business.”
He said that 33,000 non-production staff were “too much for a business our Size.”
This week, rolls-Royce said that he found new problems with problem trent 1000 engines that power the Boeing 787 Dreamliner aircraft. Over 30 planes were grounded, and analysts believe the bill to solve problems and compensation of the airline can be up to 1 billion pounds.
The firm said it will stand a deal with the unions a year ago that will protect 7,000 engineering jobs in East Midlands- Derby, Hucknall and Annesley – as part of a £150 million pound investment.
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Unite said the collective agreement included a guarantee against compulsory job cuts, and that she would like to have similar guarantees for their members affected by the announcement on Thursday, which are not covered by this agreement.
Layoffs and other costs of the restructuring, expected to reach £500 million, but will save £400 million a year by 2020.
In recent years, the East has reduced the workforce in the unprofitable marine division, which is now for sale for 2000 and laid off 800 managers in the group, but because the company hiring, the total number of job cuts was 600.
Press Secretary of the government said that the government was “in constant contact” with Rolls-Royce about its plans to reduce its back office and support functions. “This is clearly an uncertain time for affected workers and members of their families and employment Center, plus a rapid response ready to help people to return as soon as possible to work.”