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Diaranson, 18 October 2023 AWEMainta BUSINESS & FINANCE 51
Rolls-Royce Announces Global Workforce
Reduction in Effort to Rejuvenate Business
RENOWNED aircraft engine manufacturer Rolls-Royce has following a tenure of over two decades at BP, has been
unveiled a strategic initiative to slash its global workforce by straightforward in his assessment of the aerospace and
up to 2,500 positions, marking a pivotal move to streamline defense firm’s performance. He described the business as
its operations and confront a period of sustained underper- a “burning platform” and acknowledged its lagging position
formance. compared to key competitors, further noting its impact on
shareholder value.
This venerable British engineering company, responsible for “Rolls-Royce has been underperforming for an extended
crafting engines for Boeing and Airbus aircraft, has stated period,” he stated during the annual shareholder meeting in
that these reductions are part of a broader restructuring May. “Cash generation has been unsatisfactory, and our debt
effort aimed at “eliminating redundancy and achieving cost- remains too high. A significant portion of our gross profit is
efficiency.” These organizational changes will result in the allocated to covering overheads and interest payments.”
elimination of approximately 2,000 to 2,500 jobs from its
worldwide workforce of 42,000, signifying a 6% reduc- Under the plan disclosed on Tuesday, teams working on
tion. Notably, Rolls-Royce distinguishes itself from Rolls- product safety and engineering standards will be integrated
Royce Motor Cars, a wholly owned subsidiary of BMW, the into a unified unit, while back-office functions encom-
two companies having separated in the 1970s despite their passing finance, legal, and human resources will be consoli-
shared name. dated. The restructuring will also see the departure of Chief
Technology Officer Grazia Vittadini in April 2024.
CEO Tufan Erginbilgic affirmed, “We are shaping Rolls-Royce
for the future. This entails creating a more streamlined and Investors responded positively to the changes, briefly
efficient organization that can deliver value to our clients, boosting the stock by more than 2% during early trading.
partners, and shareholders.” Rolls-Royce shares have surged by over 200% over the past
year, marking the most robust performance in London’s
This restructuring endeavor constitutes the latest in a series FTSE 100 index.
of attempts by the company to reposition itself. During the
COVID-19 pandemic, Rolls-Royce had set an initial target of According to Victoria Scholar, the Head of Investment at
shedding at least 9,000 jobs due to the sharp downturn in Interactive Investor, “Erginbilgic’s tenure couldn’t be off to
air travel. In 2018, it had also initiated a plan to eliminate a better start,” highlighting the remarkable surge in profits
4,600 positions in pursuit of cost savings. during the first half and the success of the transformation
program in conjunction with an uptick in international flying
Erginbilgic, who assumed the position of CEO in January post-pandemic and increased defense expenditures.
