British engineering giant Rolls-Royce has announced today it will cut 600 jobs in its marine division in response to the challenging market conditions.
The decision will mostly affect the firm’s facilities in Scandinavia where it works on ship design and propulsion equipment for the oil and gas industry.
The firm said 50 per cent of redundancies will take place in Norway, while only around 30 UK-based positions will be eliminated, mostly those in support and purchasing roles. The rest of the cuts will come globally. The marine division employs around 6,000 staff in 34 countries.
"We are transforming our marine business and while we are making good progress on cost, the effect of low oil prices means we have to continue to look for further efficiencies," said Rolls-Royce marine president Mikael Makinen.
Rolls-Royce employs about 700 people in its marine division in the UK, mostly in Derby, Warwick, Bristol and the group’s headquarters in London.
The firm has not ruled out further job cuts and said the intervention will generate approximately £25m of savings from 2016 onwards.
The marine division cuts follow major job reductions in Rolls-Royce’s aerospace and land and sea divisions, announced last November, where a total of 2,600 positions are to be eliminated over an 18-month period.
The job cuts are part of a major restructuring programme designed to revitalise Rolls-Royce’s business, which has been hit by the shrinking budgets of Rolls-Royce's military clients.
In February, Rolls-Royce reported its first fall in revenues for a decade as underlying sales for 2014 fell by six per cent to £14.6bn. Its underlying profits were eight per cent lower at £1.62bn over the same period.
In the UK the firm employs 25,000 staff and a total of 55,000 worldwide.
The value of Rolls-Royce’s shares dropped by one per cent in the wake of the announcement on Monday.