British multinational engineering company Rolls-Royce Holdings Plc is reportedly planning to cut 15% jobs as the airline industry globally struggles to tide over the ongoing coronavirus crisis.
According to a Financial Times report, senior executives of the aero-engine maker have begun work on a restructuring plan that would shrink the 52,000-strong workforce by up to 15%.
As per sources mentioned in various media reports, the company top management is yet to close in on the decision, and talks with the labor unions are still going on. Based on the company’s data, the decision would impact about 8,000 employees of its 52,000 strong workforce.
The airline industry has been globally hit by the coronavirus pandemic as travel restrictions have been put on place by governments around the world in order to contain the virus. Fleets of airlines have been now grounded and airline companies are only surviving on cargo plane revenues.
Major aerospace manufacturers like Airbus and Boeing have announced lower production rates for key jetliner programs. Boeing also went on to announce that it would reduce its headcount by 10% to save costs.
Earlier this week, Boeing CEO Dave Calhoun said that it will take years for the aircraft-building business to return to its pre-pandemic levels.
The airline industry has been resorting to several tough measures to save cost in these unprecedented crisis. Flight carriers have now resorted to layoff and furloughs to sustain themselves to deal with the crisis.
Recently, Ryanair announced that it is preparing to cut 3,000 jobs while British Airways said that it would also reduce headcount by laying of 12,000 employees.
Although Rolls-Royce confirmed the likelihood of job cuts, it didn’t comment on the number of job loss.
“We have taken swift action to increase our liquidity, dramatically reduce our spending in 2020, and strengthen our resilience in these exceptionally challenging times,” the company said in a statement Friday. “But we will need to take further action.”
Rolls-Royce said it has promised employees more details before the end of the month. The risk of a 15% cut of the company’s workforce was reported earlier by the Financial Times, which said it would be the biggest reduction in more than 30 years.
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