Rolls-Royce CEO cuts 4,600 jobs to boost profits

Rolls-Royce is to cut 4,600 jobs over two years in the latest attempt by boss Warren East to cut costs and make Britain’s best known engineering company more profitable and dynamic.

East, a softly-spoken former tech boss, has overhauled the 134-year-old Rolls since he took charge in 2015 but the new cuts come as the group grapples with an aero-engine problem that has grounded planes and angered clients.

Warren East, CEO of Rolls-Royce

The announcement, which is not linked to the Trent 1000 engine issue, marks the biggest round of job cuts since the company was forced to retrench during the aviation crisis that followed the 9/11 attacks in the United States in 2001.

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The plan will remove just over 10 percent of the workforce, targeting duplication in corporate and management roles to try to save 400 million pounds ($536 million) a year by 2020.

Two thirds of the job cuts will fall in Britain, where it employs 15,700 at its headquarters in Derby, central England. The cuts will not affect its engineers, it said.

“Rolls-Royce is at a pivotal moment in its history,” East told reporters. “We are poised to become the world leader in large aircraft engines. But we want to make the business as world class as our engineering and technology is.

“We are proposing the creation of a much more streamlined organization. We have to significantly reduce the size of our corporate center, removing complexity and duplication that makes us too slow, uncompetitive and too expensive.”

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(REUTERS)

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