MIAMI – UK engine manufacturer Rolls-Royce has announced it will slash up to 8,000 jobs in the country due to the ongoing COVID-19 pandemic.
This is due to aircraft manufacturers such as Airbus and Boeing being forced to cut production due to no airlines wanting or needing to take any new aircraft at this present time.
Airbus had to cut its production by a third and has furloughed 3,200 staff members at the time of writing, with Boeing reducing its workforce by around 10%.
The 8,000 job cuts in the UK are out of 23,000 that are currently employed in that country, representing nearly a 35% cut.
Rolls Royce had already announced it would be implementing cost saving plans to give the firm an extra £750m in additional cash flow.
The engine manufacturer said that on top of this, “further action” is needed and that “efforts to mitigate the impact are ongoing.”
A spokesman for the engine firm gave an update regarding the now “unprecedented” times the industry is having to face.
“We have taken swift action to increase our liquidity, dramatically reduce our spending in 2020, and strengthen our resilience in these exceptionally challenging times.”
“But we will need to take further action. We have promised to give our people further details of the impact of the current situation on the size of our workforce before the end of this month.”
Those at the plant in Derby will be mostly affected, especially as around 10,000 employees out of the 23,000 work there.
This news was first reported by the Financial Times, in which it is stated that the firm was expected to make job cuts due to the reduced production rates, of which it had no choice to do so, otherwise Airbus and Boeing would have had surplus to current requirements, costing even more money for the company.
Its understood that globally, there will be a 15% cut from the firm, but the nearly 35% cut in the UK alone will do significant damage to the UK aerospace industry.
The firm also suspended its dividends for the first time in more than 30 years last month as well as cutting back on capital expenditure and ditching plans to have around £1bn in cash flow by the end of 2020.
The move will also provide a blow to the UK government, as the job cuts will still be going ahead despite its efforts to preserve employment by offering to pay 80% of employee wages nationwide.
It remains clear that as the mainstream aircraft manufacturers are beginning to feel the pinch, so will the suppliers themselves. As the industry continues to grapple with this pandemic, only time will tell when some form of recovery can actually be reached.