Rolls-Royce Announce Job Cuts

Engineering firm Rolls-Royce has today announced in excess of 2,300 job cuts at its European and US operations, including some within the UK, as it looks to continue to cut costs and improve operating efficiency in its tightening marketplace to contend with growing competition and shrinking margins.

The firm, known also for its history in luxury motor cars, has been subject to less favourable conditions over the latter half of 2007 with the weak dollar contributing to a slowdown in revenues and rising raw material costs contributing to lower margins that the firm has been accustomed to in recent years.

As a result the company today announced that it would be cutting jobs in an attempt to yield cost savings and improve net profitability to contend with the changing market environment, which the firm hopes will help consolidate its manufacturing operations and increase shareholder value.

Rolls-Royce currently employ around 40,000 employees of which some 23,000 work in the UK, thus the cull represents a loss of 6% of the total staff and will give rise to significant severance liability with the majority coming from voluntary redundancies where possible.

Whilst it is thought that there will inevitably be some redundancies at the UK operations, the firm have as of yet to disclose how many could go in this latest round of job cuts.

“We are determined to create a leaner and more agile support structure, better suited to the global markets in which we operate…These actions will also help the group to mitigate external headwinds such as increasing raw material costs and the weak dollar,” said the firm, commenting on the move today.

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