Rolls-Royce ‘to cut 3,500 jobs’

Aero-engines group Rolls-Royce is thought to be planning to cut 3,500 jobs following a drop in business as a result of the US terrorist attacks, it emerged today.

The group would not comment on the speculation.

But a Rolls spokesman said today: ‘‘We are still working closely with our customers so we can develop a clear picture of the likely impact on business, and when this is completed we will make an announcement.’’

It is not known where the cuts will be, but any reduction is likely to hit the group’s Derby plant, which employs 12,000 of its 20,000 UK workforce.

The new job losses are likely to be in addition to the 2,000 the group already plans to axe annually for three years as part of a £150 million restructuring programme.

Today’s speculation in Sunday newspapers comes days after aircraft manufacturer Boeing announced plans to axe 12,000 workers before Christmas in the first round of cuts prompted by the terrorist attacks.

The group added that it would be forced to lay off up to 30,000 staff from its commercial division by the end of 2002.

The Rolls spokesman said that the group had no plans to issue a trading statement this week, but added that Rolls was well placed to weather the turndown hitting commercial airlines.

Around 54% of Rolls business falls into the civil aerospace sector, but of this 15% deals with corporate aircraft, which has been largely unaffected by events on September 11, and a further 37% deals with servicing and selling parts for existing engines.

The spokesman said Rolls had only been expanding its market share in the commercial airline sector for the past 10 years, and as a result the majority of its engines were less than eight years old.

He said when deciding which planes to ground airlines were more likely to favour Rolls’ ‘‘more modern, more efficient’’ engines, which will continue to need to be maintained by the group.

He added that its military, marine engine and energy businesses were unlikely to be hit by events in the US.