Rolls-Royce share price rises as more job cuts announced

 
Sarah Spickernell
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The company has been struggling due to oil price decline (Source: Rolls-Royce/Flickr)
Rolls-Royce has announced it will cut 400 more jobs in its marine business, as it attempts to reduce company costs in the face of falling oil prices.
The cut, which will be completed by the end of the year, is in addition to the 600 job losses announced in May.
The job cuts are part of a raft of measures aimed at turning around the business, whose shares have lost more than a third of their value since April. The company said it will also spend more on research and development. It added that the proposals are expected to lead to full-year savings of around £40m.
Investors welcomed the news, with shares climbing 2.34 per cent to 721p in early trading.
Mikael Makinen, president of Rolls-Royce's marine arm, said:
Reducing our workforce is never an easy decision, but the continued weak oil price, and the need to become more competitive, means it is necessary, if we are to build a strong base from which we can successfully grow this business in the future.
The marine division supplies a range of technology and services to customers operating naval, merchant and offshore vessels, and currently employs people in 34 countries around the world.
The 1,000 redundancies confirmed since the start of the year reflect the huge impact oil price declines have had on the marine division, which relies heavily on oil and gas industry. Orders have been dwindling and the company has released a series of profit warnings over the last year and a half.
In July, the company cut its profit expectations for the marine division by £85m for both 2015 and 2016. The unit's new chief executive Warren East, who began in the role three months ago, is overseeing an operational review of its operations.

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