By Robert Wall
DERBY, England-- Rolls-Royce Holdings PLC expects to make
progress on job cuts already this year after the company recently
announced it would step up efforts to curb costs.
"I would anticipate quite a large number of people would leave
the business before the end of his year," said Tony Wood, president
of Roll-Royce aerospace.
Rolls-Royce last month announced it would slash 2,600 jobs,
principally in its aerospace unit, at a cost of around GBP120
million over the next two years after Chief Executive John Rishton
complained over "mixed progress" in cost-cutting efforts across the
company.
"We are already well under way" with restructuring steps, Mr.
Wood said.
The bulk of the restructuring measures will be implemented by
the end of next year, though Mr. Wood said some cuts could continue
into 2016. Rolls-Royce has said the layoffs announced last month
aren't the end of the drive to cut costs.
The London-based company also replaced its chief financial
officer after a series of profit warnings over the past year.
Rolls-Royce said a promised return to growth in 2015 would be
delayed amid a global economic slowdown, with underlying revenue
for this year projected to fall by between 3.5% and 4%. Previously,
the company said sales would be roughly unchanged from last
year.
The effort to reign in costs comes as Rolls-Royce expects to see
a sharp rise in commercial jet engine production driven by deals to
power Boeing 787 Dreamliners planes and Airbus long-range jets. The
British manufacturer will reach more than 50% market share for
delivered widebody aircraft engines from 2016 and remain at that
level for several years, said Eric Schulz, head of large aircraft
engine programs at Rolls.
The engine maker competes for 787 orders against General
Electric Co. and is the only turbine provider on the Airbus A350,
due for its first delivery this month, and the A330neo jets set to
enter service in 2017.
The increase in production should help Rolls-Royce in its effort
to become more efficient as production facilities built to
accommodate the anticipated output increase become fully used.
Write to Robert Wall at robert.wall@wsj.com
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