Rolls-Royce, the British maker of plane engines, said Thursday that it plans to cut 4,600 mainly British jobs by 2020, adding to thousands of cuts already announced in recent years.
“Rolls-Royce announces the next stage in our drive for pace and simplicity with a proposed restructuring that will deliver improved returns, higher margins and increased cash flow,” the group said in a statement.
The London-listed company, whose engines are used in Airbus and Boeing aircraft, said the latest cuts would produce o400 million ($536 million, 454 million euros) of annual cost savings by the end of 2020.
Rolls has faced a tough trading environment in recent years on weak demand for its plane engines and marine power systems.
Although it roared back into profit last year, this was largely owing to a recovery in the pound.
“Our world-leading technology gives Rolls-Royce the potential to generate significant profitable growth,” the company’s chief executive Warren East said alongside Thursday’s announcement.
“The creation of a more streamlined organisation with pace and simplicity at its heart will enable us to deliver on that promise, generating higher returns while being able to invest for the future,” he added.
Rolls said the latest round of restructuring was expected to cost the group o500 million.
“These changes will help us deliver over the mid and longer-term a level of free cash flow well beyond our near-term ambition of around o1 billion by around 2020,” East added.