Rolls-Royce to slash thousands of jobs under turnaround plan

Rolls-Royce is set to slash as many as 2,500 jobs across the world as part of its new chief executive’s turnaround strategy.

The FTSE 100 engineering giant, which secured sales of £12.7billion last year, told investors on Tuesday that efforts to reduce its 42,000-strong workforce by 2,000 to 2,500 roles would help ‘remove duplication and deliver cost efficiencies’.

The engine-maker behind the Airbus A350 and Boeing 787 has suffered several restructurings over the last decade, costing 13,000 jobs, and chief executive Tufan Erginbilgic said the latest revamp will ensure the business is ‘fit for the future’.

A reduction of 2,500 roles could net the company £200million in annual savings, according to analysts.  

Rolls-Royce has endured a number of restructurings over the last decade 

Rolls-Royce will focus on ‘core’ capabilities, with engineering technology and safety units coming together as one team across the group, allowing for greater standardisation and efficiency.

The impact will see tech boss Grazia Vittadini exit the business next year, with director Simon Burr taking charge of the division.

‘The proposals include creating a new enterprise-wide procurement and supplier management organisation to support the consolidation of group spend, leverage scale and develop consistent best in class standards,’ the group explained.

Mr Erginbilgic, who joined in January, said: ‘We are building a Rolls-Royce that is fit for the future. That means a more streamlined and efficient organisation that will deliver for our customers, partners and shareholders.

‘Our business is full of committed, talented people and I believe these changes will enable them to build greater capability in areas that are key to our long-term success.

‘This is another step on our multi-year transformation journey to build a high performing, competitive, resilient and growing Rolls-Royce.’

Rolls-Royce shares were up 2.1 per cent to 218.1p in early trading.  

Rolls-Royce swung back to a profit of £1.4billion in the first six months of this year, thanks to a bounce back in international travel and price hikes.

Its shares have been among the FTSE 100’s top performers this year, upgrading profit forecasts even as others issued warnings. 

After a tough few years, Rolls-Royce is once again beginning to deliver but bosses are acutely aware profit margins remain well short of US rival GE.

Richard Hunter, head of markets at Interactive Investor, said: ‘A strategic overhaul at Rolls-Royce which will result in the global loss of 2500 roles was well-received given savings which could amount to up to £200million. 

‘The shares have had a stelar year so far, rising by more than 130 per cent, as any number of factors have played into the company’s hands, not least of which has been the return to airline travel.’

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