While wanring that it will take “several years” for the global airline industry to completely recover the damages caused by the novel coronavirus pandemic, the Derby, UK based company Rolls-Royce has announced 9,000 job cuts.
This job cut, which is almost one fifth of its total workforce, will mainly impact the employees in its civil aerospace division, said the plane engine maker.
“This is not a crisis of our making. But it is the crisis that we face and must deal with,” company chief Warren East said.
It is expected that the majority of the layoffs will take place in the United Kingdom at the company’s unit in Derby.
The company had not yet concluded on “exactly” where the job losses would as it still needs to consult the issue with the workers’ unions, said East. Rolls-Royce employs 52,000 people globally.
“It’s fair to say that of our civil aerospace business approximately two-thirds of the total employees are in the UK at the moment and that’s probably a good first proxy,” East however said.
There are 30 sites in the UK of Roll-Royce’s civil aerospace division with the largest unit in Derby.
The decision by the company was described as “shameful opportunism” by the Unite the union. “This company has accepted public money to furlough thousands of workers,” said Unite’s assistant general secretary for manufacturing, Steve Turner.
“Unite and Britain’s taxpayers deserve a more responsible approach to a national emergency. We call upon Rolls-Royce to step back from the brink and work with us on a better way through this crisis.”
Last month, the company had furloughed 4,000 workers in the UK. The company has also placed about 3,700 of its employees on the Coronavirus Job Retention Scheme of the UK which allows the company to pay only 20 per cent of the salaries while the UK government pays the rest 80 per cent for monthly wages of up to £2,500 a month.
But East said: “No government can extend things like furlough schemes for years into the future. We have to look after ourselves and make sure we meet medium term demand.”
Analysts however said that the job cut announcement by Rolls-Royce was not completely unexpected because of the very sorry state of the global airline industry that have slashed about 90 per cent or more of their flying hours. Plane making giants Airbus and Boeing have also cut down on their production numbers for the next few years.
Despite the reasons however, this job cuts is a heavy blow to one of the few world-class manufacturing companies of the UK.
Even though the company has already made use of the furlough scheme of the UK government that has helped the company to pay the wages of about 4,000 of its employees, companies should not expect that the scheme will go on for several years, said Warren East.
“The crisis is having a major impact on aerospace companies who provide high value, long-term jobs in all regions and nations of the UK, putting thousands more jobs at risk now and in the months ahead,” said Paul Everitt, chief executive of ADS, the aerospace industry association.
(Adapted from BBC.com)