Rolls-Royce, a prestigious British engineering company, has announced its intention to cut up to 2,500 jobs as part of a strategic effort to enhance efficiency under the leadership of Tufan Erginbilgic, who assumed the role of CEO in January. This move represents another attempt to address long-standing inefficiencies at Rolls-Royce, which has struggled to match the margins of its main competitor, General Electric (GE), in the widebody aircraft sector. Over the past decade, the company has undergone several restructuring efforts, resulting in the reduction of over 13,000 jobs.
In July, under Erginbilgic’s leadership, Rolls-Royce initiated operational improvements that led to a profit upgrade, and he indicated that more changes were on the horizon. This recent announcement outlines the company’s plan to eliminate up to 2,500 roles from its total workforce of 42,000. Erginbilgic emphasized that these changes are part of a broader transformation strategy aimed at creating a highly efficient, competitive, resilient, and growing Rolls-Royce.
As a part of this streamlining plan, Rolls-Royce will merge its engineering technology and safety groups, which will lead to the departure of Chief Technology Officer Grazia Vittadini in April 2024. Additionally, the plan aims to enhance procurement and supply chain management to reduce costs and consolidate functions like finance, legal, and human resources across the group to create synergies.
This initiative follows two previous turnaround plans launched by Erginbilgic’s predecessor, Warren East. In 2020, the company initiated a plan to navigate the challenges posed by the pandemic, resulting in the reduction of 9,000 jobs. In 2018, another turnaround plan was implemented, leading to 4,600 redundancies.