This article is more than 2 years old

This article is more than 2 years old

Rolls-Royce has announced it is to cut 4,600 jobs as part of a major shakeup of its business, mainly affecting managerial and administrative roles in the UK.

Warren East, the aircraft engine maker’s chief executive, said the UK would bear the brunt with around 3,000 of the job losses, and that he could not rule out compulsory redundancies.

“It’s a horrible decision, never easy,” he said, but that the cuts were necessary “if we want to be around for the next 100 years”.

The job losses will fall heavily on Derby, the group’s biggest manufacturing base in the UK, which currently has a workforce of 15,700 people. The firm’s HR, finance, and legal departments are also based in Derby. Some corporate and support jobs in Bristol, its second-biggest base in the UK, will also go.

While most of the cuts will be in middle management jobs, engineers working on early-stage design will also be laid off as they are not needed at present, the group said. Rolls-Royce said it was still hiring engineers in electrification and digitalisation.

Approximately 1,500 of the jobs will be axed by the end of the year. It is the company’s biggest round of redundancies since 2001.

Rolls-Royce said the move would simplify the business into three customer-focused units with smaller corporate and support functions and reduce management layers and complexity, including within engineering. At the same time, it is ramping up production and hopes to be making 600 engines for wide-body aircraft a year by 2020, twice as many as five years ago.

The company employs 55,000 people worldwide. It has a workforce of 26,000 in the UK, which includes contractors.

Britain’s biggest union, Unite, warned Rolls-Royce against cutting “too deep and too fast”.



Its assistant general secretary for aerospace, Steve Turner, said: “This announcement will be deeply unsettling for Rolls-Royce workers and their families and could have a dire economic impact on local communities reliant on Rolls-Royce jobs.”



East, who took the helm three years ago, expressed frustration at the pace of change at the business, and said: “We must create a commercial organisation that is as world-leading as our technologies. We need to modernise the way in which we do business.”

He said the 33,000 non-manufacturing staff were “too many for a business of our size”.

This week, Rolls-Royce said it had discovered new problems with its troubled Trent 1000 engines, which power Boeing’s 787 Dreamliner aircraft. More than 30 aircraft have been grounded, and analysts reckon the bill for fixing the problems and paying compensation to airlines could total up to £1bn.

The firm said it would stand by a deal made with the unions a year ago that will protect 7,000 engineering jobs in the east Midlands – Derby, Hucknall and Annesley – as part of a £150m investment.

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Unite said the collective agreement included a guarantee against compulsory redundancies, and that it would be seeking a similar guarantee for its members affected by Thursday’s announcement who were not covered by that agreement.

The redundancies and other restructuring costs are expected to reach £500m, but would save £400m annually by 2020.

In recent years East has reduced the workforce in the loss-making marine division, which is now up for sale, by 2,000 and laid off 800 managers across the group, but because the company has also been hiring, the net number of job cuts was 600.

A government spokesman said the government was “in regular contact” with Rolls-Royce on its plans to reduce its back-office and support functions. “This is clearly an uncertain time for affected employees and their families and Jobcentre Plus Rapid Response stands ready to help people back into employment as soon as possible.”