COVID-19 impact: Britain's Rolls-Royce to axe 9,000 jobs in air travel slump; more firms resort to lay off on recession woes
Rolls-Royce said it was targeting 1.3 billion pounds of annual cost savings, with about 700 million coming from layoffs plus other cuts that could include factory closures.
More companies resorted to lay off amid mounting concerns of global recession in the wake of coronavirus outbreak and subsequent lockdown around the world. The delay in developing an effective vaccine to contain coronavirus has increased concerns on resuming business activities. As a result, several companies resorted to cost-cutting measures including lay offs.
UK-based engine maker Rolls-Royce said that it plans to cut about 9,000 jobs, or more than a sixth of its workforce, in the latest blows to the Britain's economy and aviation industry dealt by the coronavirus pandemic, reported Reuters.
The company, which makes engines for planes such as the Boeing 787 and Airbus 350, said on Wednesday it could also close factories as it shrinks to fit the smaller market it expects to emerge from the crisis.
Airlines and their supplies have been among the hardest hit businesses by lockdowns to contain the pandemic, with passenger air travel grinding to a virtual halt.
“We have to reduce our cost base and adapt to the new world, matching our capacity with expected demand,” Rolls-Royce chief executive Warren East told reporters, unveiling the company’s biggest round of cuts since privatisation in 1987.
The 9,000 jobs, out of a global staff of 52,000, will go predominantly from Rolls’s civil aerospace business, which generates just over half of its 15 billion pounds ($18 billion)of annual revenues.
Rolls said it was targeting 1.3 billion pounds of annual cost savings, with about 700 million coming from layoffs plus other cuts that could include factory closures.
Aviation sector is one of the worst affected sectors after the COVID-19 outbreak.
Emirates plans to cut 30,000 jobs
Emirates Group is planning to cut about 30,000 jobs to reduce costs amid the coronavirus outbreak, which will bring down its number of employees by about 30% from more than 105,000 at the end of March, reported Reuters citing Bloomberg News.
The company is also considering speeding up the planned retirement of its A380 fleet, the report added, citing people familiar with the matter.
An Emirates spokeswoman said that no public announcement has been made yet by the company regarding “redundancies at the airline”, but that the company is conducting a review of “costs and resourcing against business projections”.
Virgin Atlantic to retrench 3,150 staff
British airline Virgin Atlantic said on Tuesday it planned to cut 3,150 jobs and would move its flying programme from London Gatwick to Heathrow airport as it counts the cost of the COVID-19 pandemic, reported Reuters.
The spread of the novel coroanvirus has virtually brought airports around the globe to a standstill, leaving airlines taking drastic steps to make savings.
British Airways said last week it could cut as many as 12,000 jobs, over a quarter of its total, and Virgin Atlantic Chief Executive Shai Weiss said the pandemic was the most devastating event in the airline's history.
Airbus asks staff to brace for deeper job cuts
Last month, European planemaker Airbus issued a bleak assessment of the impact of the coronavirus crisis, telling the company’s 135,000 employees to brace for potentially deeper job cuts and warning its survival is at stake without immediate action.
In a letter to staff, chief executive Guillaume Faury said Airbus was “bleeding cash at an unprecedented speed” and that a recent drop of a third or more in production rates did not reflect the worst-case scenario and would be kept under review.
Airbus said it did not comment on internal communications.
British Airways puts about 28,000 employees on furlough
British Airways may put about 28,000 employees on furlough in a bid to cut costs as more countries declared lockdowns and sealed their borders for air traffic in the wake of global coronavirus outbreak, said a news report.
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The flag carrier airline of the United Kingdom, after conducting talks with the staff, reportedly decided to give 80 percent of their usual salary, reported Bloomberg quoting Unite union.
The assistance to the British Airways' staff may also include funding by the UK government up to $3,095 a month under a national plan, the report said.
Global airlines stare at bankruptcy
A report in March this year said that the global airline industry might face its worst crisis even as the coronavirus pandemic was expected to cripple the economic activities across the world.
Most airlines in the world will be bankrupt by the end of May 2020 and the world aviation consultancy company Centre for Aviation (CAPA) said that only coordinated action by governments as well as the industry will be able to save the companies.
Renault to lay off 400 staff at Slovenia unit
French carmaker Renault plans to cut about 400 out of some 3,200 jobs at its Slovenian unit Revoz after the coronavirus epidemic hit demand for its products, Revoz said on Tuesday.
Revoz produces the Clio, Twingo and electric Smart Forfour models. Its biggest markets include France, Germany and Italy.
“Due to uncertain conditions on the global car market, which are a consequence of the Covid-19 epidemic ... and information on a fall of global orders ... Revoz will continue its production in two shifts,” it said in a statement in response to a Reuters query.
“In cooperation with agencies and the Slovenian Employment Service Revoz will organise consulting meetings for all workers who will stop working in the company (a bit more than 400 persons according to present estimates),” it said.
--With inputs from agencies
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