Rolls-Royce: Another round of job cuts due to low oil price
As with the job cuts announced in May, this new round of lay offs has been driven by the impact of the low price of oil and subsequent fall in orders, the company explained in a statement on Monday. The number of employees will be reduced by up to 400 hundred by the end of 2016.
Mikael Makinen, Rolls-Royce, President – Marine, said: “After many years of strong performance through to 2013, led by good growth in the oil and gas sector, our order book and profitability have been adversely impacted by the sharp and subsequently prolonged drop in the price of oil.
“This is a fundamentally strong business, but we have to take decisive action to position it for future growth, with a structure that is simple, efficient and effective. At the same time we will sharpen our focus on the marine technologies of tomorrow by significantly increasing our current rate of investment in research and development.
Rolls-Royce’s Marine business employs around 5,800 people in 34 countries, and supplies a range of technology and services to customers operating naval, merchant and offshore vessels.
Makinen said:“Reducing our workforce is never an easy decision, but the continued weak oil price, and the need to become more competitive, means it is necessary, if we are to build a strong base from which we can successfully grow this business in the future.”
The company expects to generate full year savings of £40m, with incremental benefits from 2016 onwards. Most of the early savings will be invested in increased R&D activity.