MAY 18, 2015 — Rolls-Royce says that it "will accelerate cost reduction programs" in its marine business and reduce the number of employees by a further 600 by the end of this year in response to "challenging market conditions."
The announcement follows an Interim Management Statement issued May 8 in Rolls-Royce said that the year had started slowly and that a "drive for further efficiencies" was underway.
The company's marine business employs around 6,000 people in 34 countries. It says that while the job reductions will be global, around half will be in Norway, where the majority of employees and manufacturing facilities are located.
Mikael Makinen, Rolls-Royce, President – Marine, said: "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.
"It is never an easy decision to propose reductions in our workforce, but it is a sign of the challenging market in which we operate. We will work closely with employees and their representatives as we manage this change.
"The future prospects for the Marine business remain bright, and we are focused on maintaining our position as a technology leader, but we must drive further cost reduction today so that we are ready to grow tomorrow".
Rolls-Royce anticipate the proposals will have a broadly neutral impact on profits in 2015 and generate approximately £25 million of benefits from 2016 onwards. The reductions announced today are in addition to programs already underway to consolidate manufacturing at several locations in the U.K., U.S., Norway, Sweden and South Korea.