Rolls-Royce will cut further 400 jobs in its marine division due to falling profits

Rolls-Royce marine division sees further job cuts

An additional 400 employees at Rolls-Royce’s marine division will be made redundant by the end of next year as the firm seeks to increase efficiency.

The engineering giant’s marine division, which manufactures systems for oil rigs and propulsion units for ships and submarines, has seen a major fall in orders due to the ongoing oil price crisis.

Dependent on oil and gas-related customers for approximately 60 per cent of its income, Rolls-Royce's marine unit previously announced it would cut some 600 positions. It currently employs some 5,800 people in 34 countries around the world.

While the previous round of job cuts hit mostly Roll-Royce's facilities in Scandinavia, the current round of cuts will affect sites around the world, with most of the streamlining focused on administrative roles.

The marine unit counted for about 12 per cent of the Rolls-Royce group's revenue in 2014.

Maintaining current profit guidance for the marine unit, Rolls-Royce said on Monday it would invest the cost-savings from the job cuts into research and development activity.

"We will sharpen our focus on the marine technologies of tomorrow by significantly increasing our current rate of investment in research and development," said Mikael Makinen, Rolls-Royce's marine president, in a statement.

The company said the latest job cuts would generate full-year savings of £40m with incremental benefits from 2016 onwards and that the cost would be covered by a previously flagged £30m restructuring charge which would now be spread over this year and next.

The firm has been struggling economically on multiple fronts since 2014, when it revealed a 13 per cent decrease in profits – the group's first drop after a decade of growth.

In addition to the oil-price crisis, Rolls-Royce’s business has suffered due to shrinking defence budgets around the world, which affected demand for its aircraft engines.

Rolls-Royce's Chief Executive Warren East, who took up the role on 2 July, is in the process of carrying out an operational review of the whole business, the results of which he will present on 24 November.

Recent articles

Info Message

Our sites use cookies to support some functionality, and to collect anonymous user data.

Learn more about IET cookies and how to control them