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Rolls-Royce, the British maker of plane engines, said today that it plans to cut 4,600 mainly British jobs by 2020, adding to thousands of cuts already announced in recent years.
“Rolls-Royce announces the next stage in our drive for pace and simplicity with a proposed restructuring that will deliver improved returns, higher margins and increased cash flow,” the group said in a statement.
The London-listed company, whose engines are used in Airbus and Boeing aircraft, said the latest cuts would produce 400 million pounds (USD 536 million) of annual cost savings by the end of 2020.
Rolls has faced a tough trading environment in recent years on weak demand for its plane engines and marine power systems.
Although it roared back into profit last year, this was largely owing to a recovery in the pound.
“Our world-leading technology gives Rolls-Royce the potential to generate significant profitable growth,” the company’s chief executive,Warren East said alongside today’s announcement.
Rolls said the latest round of restructuring was expected to cost the group 500 million pounds.
“These changes will help us deliver over the mid and longer-term a level of free cash flow well beyond our near-term ambition of around 1 billion pounds by around 2020,” East added.
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