Rolls-Royce job cuts blamed on low oil prices
ENGINE manufacturer Rolls-Royce has blamed low oil prices for its decision to cut a further 600 jobs by the end of this year, as part of cost-reduction plans in its marine business.
The job losses announced yesterday are in addition to the 2,600 role reductions announced previously.
The company said that around half of the new job losses will occur in Norway, while the rest of the reductions will occur elsewhere in the marine division, which operates in 34 countries worldwide.
Rolls-Royce said in a market update earlier this month that it had suffered a slow start to 2015 and was consequently looking to achieve “further efficiencies”.
Mikael Makinen, president of the marine division, said yesterday: “We are transforming our marine business, and while we are making good progress on cost, the effect of low oil prices means we have to continue to look for further efficiencies. 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.”
The benchmark price for Brent crude oil more than halved between June 2014 and March this year, but has since rallied to around $66.
The company said the job cuts will have a “broadly neutral impact” on profits this year, but would generate around £25m of benefits from 2016.
Shares in Rolls-Royce dipped by 0.3 per cent yesterday.