RR. Rolls-royce Holdings Plc

   By Adria Calatayud 
 

Rolls-Royce Holdings PLC said Wednesday that it plans to cut 9,000 roles, out of a global workforce of 52,000, as part of a major restructuring as it prepares for period of reduced demand from civil aerospace customers due to the coronavirus pandemic.

The British aircraft-engine maker said the proposed reorganization is expected to generate annualized savings of more than 1.3 billion pounds ($1.57 billion), and will come at a cost of around GBP800 million. Cash outflows related to the restructuring will be incurred across 2020 to 2022, the company said.

Rolls-Royce said the proposed reorganization will mainly affect its civil aerospace operations. The company said its power-systems business and ITP Aero are currently developing, negotiating and executing measures to deal with the current situation, while its defense operations have remained robust during the pandemic.

The restructuring comes on top of actions already taken by Rolls-Royce to strengthen its financial resilience and reduce cash expenditure in 2020 in the wake of the pandemic, and seeks to address medium-term structural changes in preparation for a slump in activity in the commercial aerospace market, the company said.

"Governments across the world are doing what they can to assist businesses in the short-term, but we must respond to market conditions for the medium-term until the world of aviation is flying again at scale, and governments cannot replace sustainable customer demand that is simply not there," Chief Executive Warren East said.

Write to Adria Calatayud at adria.calatayud@dowjones.com

(END) Dow Jones Newswires

May 20, 2020 02:40 ET (06:40 GMT)

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