Rolls-Royce cuts 9,000 jobs as airlines turn off engines

Rolls-Royce, the British maker of plane engines, said Wednesday it will cut at least 9,000 jobs and slash costs elsewhere, as the coronavirus hammers the aviation sector.

"This is not a crisis of our making. But it is the crisis that we face and we must deal with it," chief executive Warren East said in a statement announcing that Rolls would cut nearly one-fifth of its global workforce.

"Our airline customers and airframe partners are having to adapt and so must we."

Unions said they expected most of the cuts to occur in the UK, while analysts said the knock-on effect for supply chains meant many more people working across the aerospace industry were set to lose their jobs.

Rolls said it expected "the loss of at least 9,000 roles" from a global workforce of 52,000 and would also cut "expenditure across plant and property, capital and other indirect cost areas".

The measures is expected to hand the company annual savings of more than £1.3 billion ($1.6 billion, 1.4 billion euros).

The restructuring will cost Rolls about £800 million.

Rolls said the restructuring would predominantly affect its civil aerospace business.

"Our defence business, based in the UK and US, has been robust during the pandemic, with an unchanged outlook, and does not need to reduce headcount," it added.

Rolls has already spent the past two years cutting thousands of management roles following weak demand for its power systems used by the marine industry. "The restructuring announced... (in) June 2018 will transition into this wider proposed reorganisation," Rolls said Wednesday.

"Focused predominantly on reducing the complexity of our support and management functions, the programme has substantially delivered on its objectives."