Rolls-Royce: 3,000 staff explore voluntary redundancy

Marco Green
July 11, 2020

More than 3,000 workers have expressed interest in voluntary redundancy at Rolls-Royce across its United Kingdom operations.

Shares in Rolls-Royce, which said it has begun the process of cutting 9,000 jobs, traded 6.9% lower as of 8.17am in London, taking the decline so far this year to 60%.

Total cash going out of the business during the period was £3bn, and Rolls is expecting this to rise to a total of £4bn for the full year. The vast majority of the 9,000 job cuts fall on its aviation business, which makes engines for planes.

Warren East, its chief executive, said: "These are exceptional times". We started this year with positive momentum and strong liquidity and acted swiftly to conserve cash and cut costs to protect Rolls-Royce during the pandemic.

"This means we have had to take the very hard decision to lose people who have helped us become the company we are and who have been proud to work for Rolls-Royce".

Shares in Rolls-Royce dropped 7.1% on Thursday morning.

The company said its cashflow had been significantly affected by Covid-19 in the first half of the year.

Employee John Payne, who has worked for Rolls-Royce for 40 years, previously said: "Derby will be decimated, there are some good engineers there".

London-based Rolls said today it has a commitment for a five-year loan worth £2 billion that is underwritten by a syndicate of banks and backed by a guarantee from Uk Export Finance.

In a trading update ahead of its interim results for the period to June 30, 2020, the FTSE 100-listed group said: "We now expect our widebody engine flying hours to recover to approximately 70% of 2019 levels in 2021 with OE deliveries likely to remain subdued".

He said it would take the aviation industry "several years to recover", and the firm was resizing its civil aerospace business "to adapt to lower medium-term demand from customers and help secure our future". A business model that relies heavily on the number of hours its engines spend in the air is a tough deal in the face of worldwide travel disruption.

"We now forecast widebody engine flying hours to be down in the region of 55% this year, with more long-haul routes opening up in the fourth quarter", it said in the statement. "By 2021 engine flying hours are only expected to be at 70% of pre-pandemic levels".

Other reports by Click Lancashire

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