Rolls-Royce to axe up to 2,500 jobs across business

Rolls-Royce is to cut up to 2,500 jobs globally as part of an overhaul under its new boss.

Tufan Erginbilgic, who was appointed as chief executive in January, said the shake-up will make the Derby-based engineering giant “a more streamlined and efficient” business.

The aerospace engineering specialist, which currently employs 42,000 people, said it also plans to remove “duplication” and deliver cost efficiencies through the latest stage in its transformation plan.

Rolls-Royce did not disclose where the job cuts will take place but around half of its current workforce are based in the UK.

The company’s plan will include creating a new procurement division in order to reduce costs by leveraging the group’s scale.

It also said that some back-office operations, such as human resources and finance, will be brought closer together.

Mr Erginbilgic said: “We are building a Rolls-Royce that is fit for the future.

“Our business is full of committed, talented people and I believe these changes will enable them to build greater capability in areas that are key to our long-term success.

“This is another step on our multi-year transformation journey to build a high performing, competitive, resilient and growing Rolls-Royce.”

The new boss had been expected to reveal a significant shake-up involving job cuts after describing Rolls-Royce’s performance as “unsustainable” earlier this year.

The former BP executive told staff in January there was a “last chance” to change, according to a briefing seen by the Financial Times.

The latest cuts come after it axed around 9,000 jobs shortly after the pandemic after first starting its transformation plan in order turn its finances around.

Victoria Scholar, head of investment at Interactive Investor, said: “Things couldn’t be going much better for Erginbilgic, who took to the helm at the start of the year.

“For years, the engine maker failed to rev up investor confidence with the stock sliding from the highs in 2014 to the trough during the challenging pandemic period.

“Now Rolls-Royce is the best performing stock on the FTSE 100 over a one-year period, up over 200%.”

Shares moved 0.7% higher on Tuesday morning as investors welcomed the cost-cutting efforts.