Rolls-Royce to cut 9,000 jobs amid air travel slump

Rolls-Royce will cut at least 9,000 jobs and could shut some of its factories.

The jet-engine maker made the announcement Wednesday (May 20), and said the cuts were to cope with a severe decline in air travel.

Aerospace engineering is the key part of Rolls-Royce business.

It supplies engines to both Boeing and Airbus, and is paid by airlines based on how many hours they fly.

Its earnings are thus certain to take a hit if air travel demand takes years to recover from the global health crisis.

Rolls-Royce relies on aerospace for just over half its annual revenues.

In 2019, that totalled around 15 billion pounds – or $18 billion.

The company said the job cuts would mostly be in its civil aerospace unit, and could generate annual cost savings of around $1.6 billion.

CEO Warren East indicated the majority of jobs cuts will be in the UK where most of its aerospace employees are based.

In total, Rolls-Royce hires 52,000 people worldwide and stands to lose 17% of its workforce after Wednesday’s announcement.