RollsRoyce to Cut Another 800 Jobs at Ailing Marine Business

Rolls-Royce to Cut Another 800 Jobs at Ailing Marine Business

The marine arm has already shut or sold 12 of its 27 sites, and is looking at cutting more locations and shifting some production to emerging economies.

As the lower price of crude hurts demand for oil-industry exploration and service vessels, Rolls-Royce Holdings Plc. (IW 1000/192) will cut 800 more posts at its marine-equipment and ship-design unit, or about 17% of the remaining workforce.

Restructuring steps will include a further simplification of the unit’s structure, including a “streamlining” of senior management, plus unspecified cost-reduction initiatives, London-based Rolls-Royce said on Dec. 1.

The measures will cost about 20 million pounds (US$25 million), split between this year and next, and should deliver annualized savings of up to 50 million pounds from mid-2017.

Rolls, best known for its aircraft engines, has already cut more than 1,000 jobs at its marine operation since 2016, with the division currently employing 4,800 people across 34 countries, including 1,900 in Norway, where it is based.

The offshore market is showing no sign of recovery, with the outlook bleaker as the backlog shrinks, CEO Warren East said Nov. 16. The marine arm has already shut or sold 12 of its 27 sites, and is looking at cutting more locations and shifting some production to emerging economies.

Rolls-Royce’s aviation business has also been hit by a slump in sales of business and regional jets, lower utilization of older wide-body planes and a slowdown in A330 engine deliveries as  Airbus Group SE switches to an upgraded model. East has said the company is on course to deliver savings close to 200 million pounds by the end of 2017.

The marine division currently supplies gear including propellers, rudders and propulsion equipment for offshore vessels, oil and gas platforms, freighters, cruise liners, ferries, trawlers, luxury yachts and naval craft, as well as designing entire ships. While the unit markets engines, they’re made by the power systems arm, which has also laid off staff.

As part of the changes Rolls plans to establish a services hub and research center for new propulsion products in Ulsteinvik, Norway.

By Christopher Jasper

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