Rolls-Royce set to cut up to 2,500 jobs as CEO extends efficiency push
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The last time Rolls-Royce cut a large number of positions was in the early days of the Covid-19 pandemic, when aircraft around the globe were largely grounded.
PHOTO: REUTERS
LONDON – Rolls-Royce is poised to announce the deepest job cuts under chief executive officer Tufan Erginbilgic as he streamlines the British manufacturer to prepare for a demand for large aircraft engines.
The reductions are set to total 2,000 to 2,500 employees, or about 6 per cent of the global staff, according to people familiar with the matter, who asked not to be identified discussing plans that have not been announced.
The cuts target the global white-collar workforce, including senior management, one of the people said. A representative of the company declined to comment.
About half of Rolls-Royce employees are in Britain. A further 11,000 employees work in Germany and about 5,500 are located in the United States.
The company also counts Singapore as one of its five global hubs. In response to queries from The Straits Times on whether the country is affected by the cuts, a spokesman said: “Rolls-Royce is embarking on our transformation that will support our global business ambitions. This exercise is ongoing and we will share within our organisation once we have updates on Singapore.”
The last time the company cut a large number of positions was in the early days of the Covid-19 pandemic,
Mr Erginbilgic is driving his turnaround effort deeper into the company after having switched some key management positions, including the head of the civil engine subsidiary.
The CEO, who likened the company to a “burning platform” shortly after taking over at the start of 2023, has presided over a more than doubling of the stock price as long-distance travel rebounds from pandemic lows. That has reignited demand for large aircraft like the Airbus A350, for which Rolls-Royce is the sole supplier.
Mr Erginbilgic, who joined the company from multinational oil and gas company BP, brought in consultants to advise him on streamlining the organisation.
Rolls-Royce makes engines for the largest commercial aircraft and earns money based on their hours of use as well as with lucrative service contracts.
Cash flow at Rolls-Royce has risen rapidly in 2023, lightening the burden of interest payments just as rate increases make borrowing more expensive. BLOOMBERG
Additional reporting by Tay Hong Yi
