Rolls-Royce has announced 9,000 job cuts – mainly in its civil aerospace wing – as a direct consequence of the coronavirus pandemic bringing the aviation industry to a shuddering halt.
The cull has been described as devastating news for the city of Derby, which is likely to see a significant proportion of the redundancies.
Rolls-Royce has lost its investment-grade rating — held for the past 20 years — after Standard & Poor’s on Thursday downgraded the company to junk status because of “prolonged weak profitability” and expectations of materially lower cash flow from its engine service contracts.
Rolls-Royce is Derby’s largest private sector employer with around 12,000 staff. As well as being home to its civil aerospace business in Sinfin, Rolls-Royce’s Defence site is in Raynesway. The firm said that it will not be looking to reduce headcount in Defence.
In a statement, Rolls-Royce said that the impact of the coronavirus pandemic on the aviation industry had been “unprecedented”.
It added that it believed it would take “several years” for the civil aerospace market to return to levels seen before the pandemic struck.
Chief executive Warren East said: “This is not a crisis of our making. But it is the crisis that we face and we must deal with it. “Our airline customers and airframe partners are having to adapt and so must we.”
“We have taken swift action to increase our liquidity and dramatically reduce our spending in 2020 to deal with the short-term impact of Covid-19,” the company said in a statement. “These measures will assist us as we weather the pandemic and emerge from the other side into a global aviation industry which will take several years to return to the levels of activity seen in 2019.”