Heads to roll at Rolls

An unhappy start to 2008 at Rolls-Royce: 2,300 European jobs are to go in its latest productivity drive.

Last Updated: 06 Nov 2012

The engine manufacturer said it wants to trim its support staff in the UK, US, Germany and Scandinavia by about 10 percent. It didn’t say how this would be divided up, but it employs about 23,000 people in the UK – some 60% of its workforce. So a large number of its white-collar workers here are likely to be affected.

Rolls-Royce is under pressure because the plunging value of the dollar (the currency in which it’s normally paid) and the rising cost of raw materials are putting the squeeze on margins. Still, it’s the first round of job cuts it’s made since the aftermath of 9/11, when the aviation industry was in turmoil.

But in general terms, the company’s actually in pretty good shape. It’s currently sitting on a record order book worth about £35bn, including a $15bn order from last year’s Paris Air Show – and once it’s sold the engines, it then gets into the even more lucrative business of taking care of them afterwards.

So there’s no way it’s going to be scaling back its operations – in fact, it said today it would continue to take on 200 apprentices and graduates a year to keep up with production. It’s the poor desk jockeys that are being deemed surplus to requirements.

In a statement today, Rolls talked about ‘simplifying the organisation of management, professional and clerical staff’ in order to help it ‘mitigate external headwinds’.  Chief operating officer Mike Terrett said the company was ‘determined to create a leaner and more agile support structure, better suited to the global markets in which we operate’.

Fine words – but that won’t be much consolation to the thousands of people about to be jet-propelled onto the job market...

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