Rolls-Royce cutting 400 more jobs from marine division
Rolls-Royce is to cut an extra 400 posts from its marine division, after announcing 600 job cuts in May.
The aero-engine maker, which depends on oil and gas-related customers for about 60% of its business, blamed the sharp fall in crude prices for the cuts. The marine unit has been under pressure over the past 18 months since the price of Brent crude collapsed to six-year lows, and ship orders were cancelled. The marine business employs about 5,800 people in 34 countries. Rolls Royce shares jumped more than 3% following the announcement. Mikael Makinen, Rolls-Royce Marine president, 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." The cuts will mainly be in management and back office roles, a spokesman said. "We will be consulting with our employees and their representatives over the coming weeks and months, and expect the reduction to be completed by the end of 2016," he added. The firm expects the cuts will generate full year savings of £40m. Investment into research and development will be stepped up. Last November, the company said it would cut its headcount by 2,600 jobs, mainly in its aerospace division. In July, Rolls-Royce issued its fourth profit warning in 18 months on the back of the drop in oil prices. It said its 2015 underlying profit in the marine business would be between break even and £40m, rather than between £90m and £120m. Rolls-Royce's new chief executive Warren East, who took up the role at the beginning of July, is in the process of carrying out an operational review of the business.