Rolls-Royce axes 1,370 staff as 'bonfire' of UK job cuts raises heat on chancellor

Tom Belger
·Finance and policy reporter
·3-min read
A Rolls-Royce aircraft engine of a British Airways Boeing 747 passenger plane. Photo: Stefan Wermuth/Reuters
A Rolls-Royce aircraft engine of a British Airways Boeing 747 passenger plane. Photo: Stefan Wermuth/Reuters

Plane engine-maker Rolls-Royce (RR.L) has announced it plans 1,370 job cuts worldwide as it battles to get through the crisis facing global aviation.

It marks the latest in what unions called a “bonfire of jobs” in the past week alone in the UK. Sainsbury’s (SBRY.L), Lloyds Banking Group (LLOY.L), John Lewis, and Clarks are among the employers axing staff, sparking criticism of chancellor Rishi Sunak for not extending the furlough scheme sooner.

Rolls-Royce confirmed on Thursday it is looking to cut 950 jobs within its civil aerospace arm worldwide, and another 420 across its facilities teams.

It said it had re-opened a voluntary redundancy programme to all of its UK civil aerospace workforce, with bosses hoping more staff will volunteer to avoid compulsory layoffs. Rolls-Royce’s UK civil aerospace team make up around two-thirds of its entire UK headcount, according to PA.

The leading manufacturer of plane parts had announced in May it would axe 9,000 roles worldwide, including 3,000 roles in the UK. The latest cuts will fall within that tally as the company seeks to drastically rein in costs amid a sustained slowdown in demand as air travel has collapsed. More than 2,500 staff have already taken voluntary severance since the crisis began.

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A Rolls-Royce spokesman told Yahoo Finance UK: “The global pandemic has hit our business hard. Although we have taken swift action and put many, often painful, mitigation plans in place, we must continue to further reduce our cost base so that we can safeguard the future of Rolls-Royce, return to break even and work towards our target of reaching positive cashflow in the second half of 2021.

“We are already undertaking the largest-ever restructuring of our civil aerospace business and have today proposed further measures to protect our business.”

It came just hours after chancellor Rishi Sunak caved into business and union pressure to extend Britain’s furlough scheme, subsidising wages for at-risk jobs. It was due to end on 31 October, but was extended by a month earlier this week. Sunak then announced on Thursday it will now last until March.

The government has faced criticism for leaving employers with a cliff-edge where support drops off until the last moment, as a string of well-known companies have announced job cuts in the past week alone. Labour shadow chancellor Anneliese Dodds claimed Sunak was “always a step behind” with his economic support measures.

Rolls-Royce shares have sunk since the pandemic began as air travel has collapsed. Chart: Yahoo Finance UK
Rolls-Royce shares have sunk since the pandemic began as air travel has collapsed. Chart: Yahoo Finance UK

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John Phillips, the GMB union’s acting general secretary, said: “While the extension of furlough to March will provide much needed certainty for many workers, it has been obvious for some time that additional support was needed.

“The delay in extending the job retention scheme has caused a bonfire of jobs and investment and prevented workers and their employers from planning for the future.”

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The GMB called on employers to scrap any planned redundancies in light of the furlough extension, and the government to work more closely with unions.

The planned cull at Rolls-Royce comes after Sainsbury’s warned 3,500 jobs were at risk and Caterpillar axed up to 700 roles earlier on Thursday. John Lewis announced it would cut 1,500 head office staff, Clarks said it would axe at least 700 roles and Lloyds Banking Group said it would cut a net 730 roles on Wednesday.

The Treasury has been approached for comment.

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