Rolls Royce slashes 9000 jobs as Covid-19 crisis hits air travel

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Aerospace giant Rolls-Royce (RR.L) said it plans to cut at least 9,000 jobs, following the huge impact the coronavirus pandemic has had on the aviation industry.

"We are reviewing our footprint because obviously when you wind an operation down below a certain level then it becomes uneconomic so that might be possible", Rolls-Royce CEO Warren East said in an interview.

The cuts would comprise around 17% of the company's global workforce of 52,000 and would follow a recent bout of job cuts at Rolls-Royce that were unrelated to the Covid-19 crisis. But it is the crisis that we face and we must deal with it.

The company, which makes engines for planes such as the Boeing 787 and Airbus 350, said on Wednesday it could also close factories as it shrinks to fit the smaller market it expects to emerge from the crisis.

Air travel has ground to a virtual standstill since the coronavirus began spreading across the world and many airlines have announced steep job cuts.

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It says that the decision to cut almost a fifth of its workforce could result in savings of £700 million, mainly affecting its civil aerospace division and that the majority of the cuts will fall in the United Kingdom. "Our airline customers and airframe partners are having to adapt and so must we".

It said it will also cut spending across its plant, property and other areas to strengthen its finances.

"We must respond to market conditions for the medium-term until the world of aviation is flying again at scale, and governments can not replace sustainable customer demand that is simply not there", Mr East said.

Due to the need to consult with the appropriate employee and trade union representatives, Rolls-Royce said it was not providing further details of the impact of the proposed reorganisation on specific sites, or countries, at this stage. This is also due to a 55% drop in 2020 passenger revenue compared with previous year.

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