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Rolls-Royce Marine to axe another 800 jobs

Rolls-Royce Marine to axe another 800 jobs
Rolls-Royce will slash another 800 jobs worldwide for its marine business amid continuing weakness in the maritime market, on top of the 1,000 job cuts announced in May and October last year.

The job cuts are aimed at further restructuring and simplification of its marine business, and the series of cost reduction initiatives will result in the loss of around 800 roles and reap an estimated GBP45-50m ($57-63m) of annualised savings from mid-2017.

“The ongoing market weakness that has followed the dramatic fall in the price of oil continues to have an adverse impact upon our order book and profitability. We have made significant progress in transforming marine into a far more agile and simplified business than we were and we have to take further steps to address our cost base,” said Mikael Makinen, Rolls-Royce, president – marine.

“Reducing our workforce is never an easy decision, but we have no option but to take further action beyond the changes we have made to date,” Maikinen added.

The cost of restructuring are expected to be around GBP20m, split between 2016 and 2017. And as part of the programme, investments are being proposed to establish a R&D centre for the development of new propulsion products, and an expanded services hub for Northern Europe, both in Ulsteinvik, Norway.

Rolls-Royce said the organisational changes will increase the strategic focus on developing further electrical and digital technologies as the maritime industry shifts towards a more digital future where shipping intelligence plays a greater role.

The latest proposed job cuts are in addition to the reduction of 600 employees in May 2015 and 400 employees in October 2015.

Rolls-Royce marine business currently employs around 4,800 people in 34 countries.

The company noted that there were no signs of recovery in the offshore oil and gas market and orders for new equipment remain very weak, resulting in expectations of further revenue weakness for the business in 2017. Service revenues have also been impacted by lower utilisation of vessels.