British aerospace giant Rolls-Royce has announced it will cut at least 9,000 jobs from its workforce in the face of the major impending contraction in the aviation market in the wake of the coronavirus pandemic.
Rolls-Royce supplies engines for large commercial aircraft such as the Boeing 787 and the Airbus A350, but given the severe impact the coronavirus will continue to have on the airline industry, demand is likely to crater even further.
The cut represents a layoff of over 17 percent of the company’s 52,000 workforce, with the brunt of the impact to be borne by the company’s civil aerospace business. In doing so, the company is hoping to make annual cost savings of £1.3 billion ($1.59 billion).
“We are reviewing our footprint because obviously when you wind an operation down below a certain level then it becomes uneconomic so that might be possible,” Rolls-Royce CEO Warren East said in an interview.
Airlines the world over have grounded the majority of their fleets, and are unlikely to invest as heavily as before in new aircraft in the near-term, all of which combines as the perfect storm for Rolls-Royce, which earns revenues from the total number of hours its engines fly.
Consultations with unions are to begin shortly, the company said Wednesday.