More than 4,000 jobs have been put at risk by big employers including the UK jet engine maker Rolls-Royce, the consultancy KPMG and the Swedish electric truck firm Volta on a dark day for British industry.
Rolls-Royce plans to cut up to 2,500 jobs as part of a move to a simpler organisation “that is fit for the future”, according to its new chief executive.
The manufacturer confirmed on Tuesday that it had proposed a reduction of 2,000-2,500 roles worldwide, with the UK expected to be affected. This amounts to about 6% of its 42,000-member workforce, half of whom are in the UK.
Separately on Tuesday, it emerged that the London-listed miner and trader Glencore is to close its three underground copper mines in Mount Isa in Queensland by the end of 2025 amid rising costs for global miners, in a move that will result in the loss of about 1,000 jobs, the Australian Financial Review reported. Glencore declined to comment.
The Swedish electric lorry startup Volta Trucks decided to file for bankruptcy protection in its home country “with deep and sincere regret”, leading to the loss of 600 UK jobs.
It blamed problems with its California battery supplier, Proterra, which recently filed for Chapter 11 bankruptcy. This reduced the number of vehicles Volta could make, and has affected its ability to raise sufficient capital.
Volta, which has created a 16-tonne all-electric truck, will file for administration in England, with insolvency practitioners from Alvarez & Marsal to be appointed.
This will lead to the closure of its UK site in Warwick – where engineers have been working on 7.5-tonne and 12-tonne all-electric lorries – its London service centre and a sales office in Reading, which employs more than 600 people in total.
In another blow to UK factories, the Swedish bearings maker SKF has confirmed that it will close its site in Luton, which employs about 300 people.
The company proposed the factory closure in late May, after announcing that it was consolidating its spherical roller bearing manufacturing in Europe to ensure it remained competitive. The factory, which was SKF’s first outside Sweden when it began production in 1911, will be shut by the end of 2024.
Meanwhile, KPMG announced a fresh round of job cuts in its UK business amid a slowdown in dealmaking in the City.
The move will affect about 110 people, or almost 7% of the company’s nearly 1,700-strong UK deal advisory division.
Last month, KMPG launched a separate consultation process over plans to axe up to 125 jobs in its consulting business.
A KPMG UK spokesperson said a “challenging economic environment has driven a softening in a number of markets” and clients had paused or delayed work.
The jobs cuts come amid uncertainty over the outlook for the global economy and concerns over a potential recession in the UK.
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Rolls-Royce’s move is part of a revamp under Tufan Erginbilgiç, a former BP executive who took over at the engineer in January. He said: “We are building a Rolls-Royce that is fit for the future. That means a more streamlined and efficient organisation that will deliver for our customers, partners and shareholders.
“This is another step on our multi-year transformation journey to build a high performing, competitive, resilient and growing Rolls-Royce.”
The job reductions are thought to be mainly management and support functions rather than engineers. Rolls-Royce wants to reorganise teams such as finance, legal and HR, providing shared support to “remove duplication” and “achieve greater effectiveness”.
Erginbilgiç hinted at big changes in January, when he described the group as a “burning platform”, to prevent one of Britain’s most venerable and complex manufacturers from falling further behind its rivals.
Rolls-Royce’s financial performance has improved markedly in the past year, mainly thanks to the recovery in global air travel after the coronavirus pandemic.
The company’s civil aviation revenues are heavily dependent on selling maintenance services for the engines it makes, meaning it was hit particularly hard during the pandemic. Rolls-Royce cut 9,000 jobs in 2020 – early in the pandemic – to reduce costs.
Richard Hunter, the head of markets at the trading platform Interactive Investor, said Rolls’ work could save up to £200m.
Rolls-Royce did not quantify the cost savings achieved through the job cuts. It will reveal more about its strategic review and set new medium-term financial targets at a capital markets day on 28 November.
