Job cuts to cost Rolls-Royce £500m

Rolls-Royce has said that it will cost £500m to make the 4,600 job cuts it announced yesterday (14 June), but that it is a part of a mid-term plan to deliver “increased cash flow”.

The firm will tell analysts today that the cuts will be completed by the end of 2020 and will result in cost-savings around £400m a year.

Chief executive Warren East said: “After a decade of significant investment we are committed to delivering significantly improved returns while continuing to invest in the innovation needed to realise our long-term ambition to be the world’s leading industrial technology company. It is never an easy decision to reduce our workforce, but we must create a commercial organisation that is as world-leading as our technologies.”

The firm also said that the troubles it has encountered on its Trent 1000 engines will cost it around £440m, but that this will have no affect on its full-year cash flow for 2018.