Coronavirus: Rolls-Royce to cut at least 9,000 jobs

Lianna Brinded
Head of Yahoo Finance UK
An attendee looks at a Rolls-Royce Holdings Plc Trent XWB aircraft engine on display at the Rolls Royce pavilion. (Christopher Pike/Bloomberg)

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.

It confirmed in a statement of its “major reorganisation” of the group that it expects the job losses from its global workforce of 52,000 to help it adapt to a fall in demand from airlines.

The cuts are forecasted to save the company £700m ($856m), helping it towards its overall aim to save £1.3bn annually. The group also said it will also cut spending across plant and property, capital and “other indirect cost areas.”

"This is not a crisis of our making. But it is the crisis that we face and we must deal with it. Our airline customers and airframe partners are having to adapt and so must we. Being told that there is no longer a job for you is a terrible prospect and it is especially hard when all of us take so much pride in working for Rolls-Royce,” said Warren East, CEO of Rolls-Royce.

READ MORE: Lockdown pushes UK inflation rate to lowest level in four years

“But we must take difficult decisions to see our business through these unprecedented times. Governments across the world are doing what they can to assist businesses in the short-term, but we must respond to market conditions for the medium-term until the world of aviation is flying again at scale, and governments cannot replace sustainable customer demand that is simply not there.

“We have to do this right, which means we will work closely with our employee and trade union representatives as appropriate, look at any viable alternatives to mitigate the impact, consult with everyone affected and treat our people with dignity and respect."

The International Air Transport Association (IATA) said that estimated global airline losses from the impact of COVID-19 have risen to $314bn (£256m). This is 25% more than previously forecasted. This is also due to a 55% drop in 2020 passenger revenue compared with last year.

Watch the latest videos from Yahoo Finance UK