Thursday, 20 November 2008

Rolls-Royce to slash jobs, blames project delays

LONDON (Reuters) - British engine maker Rolls-Royce will shed between 1,500 and 2,000 jobs worldwide next year and is already in talks to cut 140 posts in Britain where there has been a string of job losses in recent weeks.

The company, which employs about 39,000 people globally, said it would make the cuts in response to delays to major aerospace projects with Boeing and Airbus, as well as the wider economic downturn.

Shares in Rolls-Royce, which supplies the defence, aerospace, marine and energy sectors, were down 2.4 percent at 261 pence by 0904 GMT, valuing it at 4.8 billion pounds ($7.2 billion).

Rolls-Royce joins a fast-lengthening list of major British companies to take an axe to their workforce, a trend likely to lead to a major rise in the country's unemployed -- already at its highest in more than ten years

Telecoms giant BT Group said last week it would make 10,000 job cuts and plumbing supplies firm Wolseley is in the process of shedding over 7,000 staff, while engineer GKN has said it will cut 1,400 and broadcaster ITV 1,000.

Rolls-Royce said the proposals would have no effect on the group's 2008 financial guidance and that the cost of cuts in 2009 should be balanced by savings achieved during the course of the year.

The British jobs are to go at its plant in Derby.

"We are determined to maintain our focus on cost reduction and competitiveness as the world economy enters a challenging period," Chief Executive John Rose said in a statement.

"It is too early to determine the precise effects of the global economic downturn and programme delays."

The aerospace delays are to the Airbus jumbo jet A380, while Boeing has suffered a series of setbacks to its new 787 'Dreamliner' plane.

Full-year pre-tax profit for the year to end-December is expected to be 886.71 million pounds ($1.34 billion), according to the average forecast of 20 analysts on Reuters Estimates.

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