When Rolls-Royce Chief Executive Tufan Erginbilgic took over the British aerospace and engineering giant earlier this year, he described the company as a “burning platform” in need of transformation. His turnaround efforts have led to higher profits in just a few months, and the stock price has soared 120% so far in 2023.
Now, the company plans to lay off 2,000 to 2,500 employees as part of cost-cutting measures to “fit for the future.”
“We are building a Rolls-Royce fit for the future. This means a leaner and more efficient organization that will serve our customers, partners and shareholders,” Erginbilgic said. in a statement Tuesday. “This is another step in our multi-year transformation journey to build a high-performing, competitive, resilient and evolving Rolls-Royce.”
The job cuts will affect Rolls-Royce globally – with the company saying job losses have been “minimized” as it has begun taking steps to control costs. Another step it announced was to integrate the company’s engineering and security teams into a single entity.
A Rolls-Royce representative declined to comment on which specific divisions would be affected by the job cuts because they have yet to be determined, but said the submarine and small modular reactor businesses, which employ a total of 4,400 people, would not be included. in. leave.
The British company currently employs 42,000 people worldwide, including 21,000 in the UK and 5,500 in the US
The company’s announcement comes as Rolls-Royce has been working on a massive overhaul of its business to help improve its financial performance. Rolls-Royce has undergone a number of restructuring efforts in recent years in response to the suspension of travel due to COVID-19.
This engineering giant design system Used in defense aircraft as well as major airlines such as British Airways, cutting thousands of jobs 2020 Rolls-Royce earns hourly revenue as air travel demand weakens its engine Used in aircraft.
Taking advantage of Rolls-Royce’s ‘last chance’
When Erginbilgic took over in early 2023, he issued dire warnings about the company’s position relative to peers.
“Every investment we make destroys value,” the new chief executive told employees in a January conference call, adding that the company’s financial performance was “unsustainable.” this Financial Times the report said.
Erginbilgic, a former senior executive at oil and gas company BP, believes Rolls-Royce’s problems are not all related to the pandemic, although it has exacerbated them.
“Rolls-Royce has not performed for a long time and this has nothing to do with the new crown epidemic, let us be very clear. The new crown virus has caused a crisis, but the current problem has nothing to do with the crisis.” Elgin Bilgic said at the time.
“Given everything I know from talking to investors, this is our last chance.”
Since Erginbilgic made an urgent call for change, the company has managed to turn around its fortunes.he Hire a consultant Helping UK multinationals streamline and focus on improving productivity and efficiency.
These actions are already showing signs of paying off – in August, Rolls-Royce reported that operating profit for the first half of 2023 had increased fivefold compared with the same period last year, to 673 million pounds (about 820 million U.S. dollars). The company also raised its full-year profit guidance as it adheres to cost-control measures.
Svlook
