Rolls-Royce to cut 9,000 jobs amid air travel slump

Britain's Rolls-Royce said on Wednesday it would cut at least 9,000 jobs from its global staff of 52,000 and could shut factories to adapt to the much smaller aviation market that will emerge from the coronavirus pandemic.

Francis Maguire reports.

Rolls-Royce will cut at least 9,000 jobs and could shut some of its factories.

The jet-engine maker made the announcement Wednesday (May 20), and said the cuts were to cope with a severe decline in air travel.

Aerospace engineering is the key part of Rolls-Royce business.

It supplies engines to both Boeing and Airbus, and is paid by airlines based on how many hours they fly.

Its earnings are thus certain to take a hit if air travel demand takes years to recover from the global health crisis.

Rolls-Royce relies on aerospace for just over half its annual revenues.

In 2019, that totalled around 15 billion pounds – or $18 billion.

The company said the job cuts would mostly be in its civil aerospace unit, and could generate annual cost savings of around $1.6 billion.

CEO Warren East indicated the majority of jobs cuts will be in the UK where most of its aerospace employees are based.

In total, Rolls-Royce hires 52,000 people worldwide and stands to lose 17% of its workforce after Wednesday’s announcement.