Rolls-Royce Weighs Workforce Cut of Up to 15% on Travel Collapse
(Bloomberg) -- Rolls-Royce Holdings Plc is considering job cuts of as much as 15% of the workforce as the aviation industry contends with an unprecedented crisis because of the coronavirus pandemic, said a person familiar with the matter.
Senior executives at the maker of jet engines have yet to finalize reductions of that magnitude and talks with labor unions are continuing, said the person, who asked not to be named because the discussions are private. A 15% cut would imply the loss of approximately 8,000 jobs, based on Rolls-Royce’s average total employment last year.
The London-based company is joining a rush to slash costs across airlines and aerospace manufacturers, which are shrinking operations as Covid-19 all but erases travel demand. Airbus SE and Boeing Co. have announced lower production rates for key jetliner programs, and the U.S. planemaker said this week that it would reduce staffing by 10%.
Rolls-Royce confirmed the likelihood of job cuts without quantifying their possible extent.
“We have taken swift action to increase our liquidity, dramatically reduce our spending in 2020, and strengthen our resilience in these exceptionally challenging times,” the company said in a statement Friday. “But we will need to take further action.”
Rolls-Royce said it has promised employees more details before the end of the month. The risk of a 15% cut of the company’s workforce was reported earlier by the Financial Times, which said it would be the biggest reduction in more than 30 years.
Spirit AeroSystems Corp., a U.S. supplier of Boeing and Airbus, announced job losses of its own. The company said it would lay off 1,450 hourly and salaried employees at its site in Wichita, Kansas. Smaller reductions will occur later this month at other U.S. sites that supply commercial-jet programs.
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