By Robert Wall And Rory Gallivan
LONDON--British engine maker Rolls-Royce Holdings PLC deepened
restructuring plans disclosing plans to 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 on
Monday.
The company last year disclosed 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 trimmed spending plans
owing to low crude prices. Almost 60% of last year's GBP1.7 billion
($2.66 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 replace retiring
Chief Executive John Rishton effective on July 2.
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