Rolls-Royce shares climb amid plans to cut 6% of global workforce
UK aerospace and defence company Rolls-Royce has confirmed it will cut up to 2,500 white-collar jobs as part of a major restructuring of its business.
The cuts are likely to fall across Rolls-Royce's global workforce of 42,000 and represent a reduction of almost six percent. The company struggled during the Covid pandemic when it was forced to raise billions of pounds to support the business, and in 2020 it cut 9,000 jobs.
(AI Video Transcript)
Rolls-Royce's response to the stock market
Rolls-Royce, an aerospace and defence company, has seen a positive response from the stock market after revealing its plans to cut costs by reducing its workforce. The company aims to eliminate 6% of its employees, mainly those in white-collar positions, over the next year. By doing this, Rolls-Royce hopes to improve efficiency and reduce expenses within its global workforce, which currently has 42,000 employees. As a result of this announcement, the company's stock has risen by 2.25% to 218 pence.
Challenges faced in the past
Rolls-Royce has faced significant challenges due to the Covid-19 pandemic, especially in its aero engines business. With travel restrictions and a decrease in demand for services, the company experienced a drastic decline in its business, as reflected in the stock chart with a significant drop of 90%. However, after appointing new CEO Tizvan Ergin-Bilic, the company saw some recent gains and hopes for structural reforms.
Job cuts
The rise in stock value following the announcement of job cuts is considered a significant change directed by Ergin-Bilic. Rolls-Royce believes that these restructuring efforts will help them navigate the challenging market conditions and drive future growth. By cutting costs and eliminating duplication, the company aims to streamline its operations and improve its financial performance. The positive response from the stock market indicates confidence in the company's ability to make the necessary transformations and regain stability.
Rolls-Royce's CEO
Overall, the announcement of job cuts at Rolls-Royce has caused an increase in stock value, signaling optimism among investors about the company's strategic changes. With the new CEO's promises of structural reforms, there is hope that these measures will help Rolls-Royce overcome the difficulties it faced during the Covid-19 crisis. The company's focus on cost efficiency and operational streamlining is expected to enhance its financial performance and position it for future growth in the aerospace and defence industry.
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