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Rolls-Royce Marine to lay off additional 400 staff

Rolls-Royce Marine to lay off additional 400 staff
Rolls-Royce will lay off up to 400 staff worldwide under its marine business by the end of 2016, on top of the reduction of 600 employees previously announced in May, due to the negative impact from low oil prices and subsequent decline in orders.

The announcement on Monday will build on the company’s series of cost reduction initiatives carried out over the past two years, and focus on improving competitiveness by reducing corporate and administrative costs, and reinvesting the savings in R&D activity.

Mikael Makinen, Rolls-Royce, president - marine, said: “After many years of strong performance through to 2013, led by good growth in the oil and gas sector, our order book and profitability have been adversely impacted by the sharp and subsequently prolonged drop in the price of oil.

“This is a fundamentally strong business, but we have to take decisive action to position it for future growth, with a structure that is simple, efficient and effective. At the same time we will sharpen our focus on the marine technologies of tomorrow by significantly increasing our current rate of investment in research and development,” said Makinen.

“Reducing our workforce is never an easy decision, but the continued weak oil price, and the need to become more competitive, means it is necessary, if we are to build a strong base from which we can successfully grow this business in the future,” he added.

Rolls-Royce's marine business employs around 5,800 people in 34 countries, and supplies a range of technology and services to customers operating naval, merchant and offshore vessels.

The company expects that the proposals will generate a full year saving of GBP40m ($61m), with incremental benefits from 2016 onwards.