Rolls-Royce has announced that it will "accelerate cost reduction programmes" in regards to 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 the company’s Interim Management Statement – delivered on May 8 – in which it confirmed that the year had “started slowly” and consequently “a drive for further efficiencies is underway.”
Rolls-Royce’s Marine business employs upwards of 6,000 people in 34 countries, and, while the reductions will be global, it anticipates that half will be in Norway, where the majority of employees and manufacturing facilities are located.
Mikael Makinen, Rolls-Royce president of Marine, commented: “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”.
The company said that it anticipates the proposals will have a “broadly neutral impact on profits in 2015” and generate approximately £25m of benefits from 2016 onwards. The reductions announced today are in addition to programmes already underway to consolidate manufacturing at several locations in the UK, USA, Norway, Sweden and South Korea.