By Robert Wall and Rory Gallivan
LONDON--British engine maker Rolls-Royce Holdings PLC (RR.LN)
deepened restructuring plans as it announced it would cut 10% of
jobs at its struggling marine business amid a sustained slump in
the oil and gas market.
The London-based company said it will eliminate 600 jobs in its
marine business by the end of the year as it reduces costs in
response to tough market conditions. The reductions will be around
the world but about half will be in Norway, Rolls-Royce said
Monday.
The company last year already announced 2,600 job cuts in its
critical aerospace activities to boost profitability.
The cuts in its marine activities come after Rolls-Royce last
year suffered repeated profit warnings in part because of weakening
demand from oil and gas companies as they cut back spending plans
owing to low crude prices. Almost 60% of last year's 1.7 billion
pounds ($2.67 billion) in underlying sales in the marine business
were linked to offshore oil and gas markets.
"It is never an easy decision to propose reductions in our
workforce, but it is a sign of the challenging market in which we
operate," said Mikael Makinen, president of Rolls-Royce's marine
division.
Rolls-Royce earlier this month warned that sales from lower oil
prices started slower than in the year prior period.
The job cuts come even ahead of the change in leadership at
Rolls-Royce where board member Warren East will next month replace
retiring chief executive John Rishton.
Shares down 9 pence or 0.9% at 1,004 pence, valuing the company
at GBP18.46 billion.
Write to Robert Wall at robert.wall@wsj.com and Rory Gallivan at
rory.gallivan@wsj.com; Twitter: @RoryGallivan
Subscribe to WSJ: http://online.wsj.com?mod=djnwires