Fresh into his role since January, Tufan Erginbilgic, the new CEO of Rolls-Royce, described the renowned engineering company as a “burning platform”. This latest announcement signifies his first major maneuver to overhaul the company. Based in Derby and a significant employer of 42,000 global professionals, with nearly half in the UK, the firm has endured substantial strains due to the prolonged pandemic-related downturn in air travel.
The UK Impact and Union’s Response
While specific details regarding the locations of the cuts remain under wraps, early indications hint at a significant reduction in back-office roles within the UK. In response to this, Sharon Graham, the general secretary of Unite, expressed her disappointment in learning about the move via media channels. She emphasized that sidestepping union negotiations would not be tolerated, stressing the importance of securing job guarantees.
Global Footprint and Anticipated Changes
Rolls-Royce, with its notable presence across Derby, Bristol, Lancashire, Glasgow, Tyne & Wear, and Rotherham, assures that its Derby-based submarines sector, backed by the Ministry of Defence and the Small Modular Reactor nuclear programme in collaboration with Qatari and US counterparts, will remain unscathed. However, alarm bells are ringing for the company’s German operations, where around 11,000 personnel might face the repercussions, especially in the Power Systems engine-building sector in the southern part of Germany.
A New Vision for Rolls-Royce
With a vision to “remove duplication and deliver cost efficiencies”, the company is steadfast in its commitment to emerge as a modernized entity. Mr. Erginbilgic, who previously served BP, has frequently voiced concerns about the firm’s unsustainable trajectory. The restructuring will witness the confluence of engineering, technology, and safety units, while chief technology officer Grazia Vittadini is set to depart. As a broader cost-saving measure, the firm is poised to enhance its procurement and supply chain operations, concurrently streamlining finance, legal, and HR teams across its diverse divisions.
In conclusion, this pivotal move follows Rolls-Royce’s tumultuous journey during the pandemic, which saw the need to procure billions to buoy the business and led to the layoff of 9,000 employees in 2020. As Erginbilgic noted, this is but a phase in the multi-year metamorphosis to sculpt a “competitive, resilient and growing Rolls-Royce.”