Rolls-Royce to cut 800 jobs as it accelerates marine business transformation

Aerospace and defence group Rolls-Royce plans to cut around 800 jobs worldwide to make savings in its marine business.

The company announced plans to accelerate the transformation of its marine business due to continuing weakness in the maritime market. Planned measures include a further simplification of the structure of the business.

Rolls said it will streamline the senior management team and announced a series of cost reduction initiatives that will result in around 800 jobs being lost worldwide and an estimated £45-50m of annualised savings from mid-2017.

The job cuts are in addition to the reduction of about 1,000 employees announced in May and October last year and the restructuring is expected to cost around £20m, split between this year and the next.

Rolls will invest in creating a research and development centre for the development of new propulsion products, and an expanded services hub for Northern Europe, both in Ulsteinvik, Norway.

It said the organisational changes will increase the strategic focus on developing further electrical and digital technologies as the maritime industry shifts towards a more digital future where ship intelligence plays a greater role.

Mikael Makinen, president of Rolls-Royce’s marine division, said: “The ongoing market weakness that has followed the dramatic fall in the price of oil continues to have an adverse impact upon our order book and profitability. We have made significant progress in transforming Marine into a far more agile and simplified business than we were and we have to take further steps to address our cost base.

"Reducing our workforce is never an easy decision, but we have no option but to take further action beyond the changes we have made to date. This remains a fundamentally strong business, but we need to overcome the immediate challenges and focus our investments on the technologies that will shape our future growth."

At 1045 GMT, Rolls shares were up 1.5% to 686.50p.