Create a free Manufacturing.net account to continue

Rolls-Royce Cutting 6 Percent Of Workforce

Aircraft engine maker aims to cut up to 2,300 managerial, professional and clerical staff to mitigate increasing raw material costs and the weak U.S. dollar.

LONDON (AP) — Rolls-Royce Group PLC, a leading manufacturer of aircraft engines, said Friday that it intends to trim nearly 6 percent of employees from its payroll.
 
The company aims to cut up to 2,300 managerial, professional and clerical staff in Britain, the United States, Germany, the Nordic countries and elsewhere.
 
In Britain, it said it hoped to achieve staffing cuts by voluntary departures.
 
''The group will continue to recruit graduates, apprentices and those required directly to deliver growth,'' the company said in a statement to the London Stock Exchange.
 
The company said the staff cuts would help to mitigate factors such as increasing raw material costs and the weak U.S. dollar.
 
In July, Rolls-Royce reported net first-half profit of 306 million pounds (euro408 million; US$600 million), half that of the same period in 2006.
 
The company said then that the dollar's weakness had raised its costs by 40 million pounds (euro53 million US$78 million), and that costs of raw materials were also rising.
 
As of November, Rolls-Royce employed 39,500 people: 23,300 in the U.K., 8,300 in North America, 2,300 in Germany, 3,400 in the Nordic countries, nearly 700 in Asia and about 1,500 elsewhere.
 
Rolls-Royce has a 49 percent share of the wide-body commercial aircraft engine market and a 34 percent share of the business jet engine market. The company had annual sales of 7.4 billion pounds (euro9.9 billion; US$14.5 billion) in 2006.
 
Bernie Hamilton of the Unite union said it understood that the company faced strong competition and was being hurt by the weakness of the U.S. dollar.
 
''Unite will do everything it can to help the company remain competitive, recognizing that this announcement comes at a time of a healthy order book and recent successes in gaining new orders,'' Hamilton said. He added that the union would oppose any compulsory layoffs.
 
Rolls-Royce shares were down 1.6 percent at 516.5 pence (euro6.88 US$10.11) on the London Stock Exchange.
More in Labor