Rolls-Royce to axe 9000 jobs in COVID-19 downturn

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Britain’s aerospace giant, Rolls-Royce, plans to cut at least 9000 jobs amid the continuing coronavirus crisis, with United Kingdom (UK) factories set to be hardest hit.

The British jet-engine maker could shut factories to adapt to the much smaller aviation market that will emerge from the coronavirus pandemic. The Derby-based company is one of the UK’s best-known industrial names which supplies engines for large aircraft such as the Boeing 787 and the Airbus A350.

The aero engine maker said it would cut at least 9,000 of its 52,000 jobs, in what would be its biggest single reduction in headcount in 30 years.

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Chief executive (CEO) Warren East warned that most of the cuts could fall in the UK as it embarks on a “major reorganization”.

The jet engine manufacturer said it is targeting £1.3 bn ($1.59 bn) in annual cost savings to weather the protracted downturn caused by the COVID-19 pandemic that has grounded much of the world’s airlines.

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The International Air Transport Association (IATA) does not expect air travel to recover to 2019 levels until 2023, which will affect demand for airline tickets, plane orders and the engines that Rolls-Royce makes for those jets.

However, a key proportion of Rolls-Royce’s civil aerospace earnings comes from aircraft owners paying regular service fees to company. A global grounding of airline fleets has hit those revenues significantly.

Pre-lockdown Rolls-Royce engines carried millions of airline passengers around the world every week. The company makes engines for the Airbus A330, A340, A350 and A380 jets, as well as the Boeing 777 and 787 Dreamliner.

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