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Rolls-Royce will lay off 9 thousand employees
Rolls-Royce plans to lay off at least 9,000 employees amid pandemic’s recent severe blows to the UK economy and the aviation industry.
The company, which makes engines for planes such as the Boeing 787 and Airbus 350, said Wednesday it could close factories to meet sagging market demands..
Airlines and their shipments are among the worst affected businesses as a result of restrictive measures to contain the virus.
The UK, like many other countries, is preparing for a deep recession, and the number of unemployed in April peaked in almost 24 years.
«We must adapt to new realities by balancing our capacity with expected demand», – Rolls-Royce chief executive told reporters Warren East, explaining the largest round of company cuts since privatization in 1987.
9 thousand of cut jobs, out of a total staff of 52 thousand people, will be predominantly for the civilian aerospace business of Rolls, which generates just over half of the group’s annual revenues.
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Rolls-Royce has a total of 23,700 employees in the UK, where nine of its 17 major manufacturing facilities are located. The company has a presence in more than 50 countries around the world. «It will not only be a UK phenomenon», – said East, referring to the reduction program.
Currently, the concern has already laid off 4,000 employees in the UK, which, according to the executive director, was only short term measure to save money this year.
However, the defense unit will be retained as military demand remains strong.
Forecasting that air travel will not recover within three to five years, East said that aviation activity would be about a third less than in 2019..
«Government schemes to help wage earners have been helpful in the short term. Now we need to prepare for a future in which airline customers will fly significantly less», – said east.
Rolls-Royce shares fell 2% last year. This year, their overall decline was 62%, sagging to 11-year lows.