Four Hundred Rolls Royce Marine Staff To Be Laid Off By End of 2016

The low price of oil and subsequent fall in orders are blamed for the layoffs.

Rolls-Royce will reduce the number of staff in its Marine business by 400 people worldwide by the end of 2016, the company this week announced.

This is in addition to a layoff of 600 employees previously announced in May, in a business that employs around 5,800 people in 34 countries.

Rolls-Royce says the layoffs are driven by the impact of the low price of oil and subsequent fall in orders.

Mikael Makinen, president, Rolls-Royce, stated that "After many years of strong performance through to 2013, led by good growth in the oil and gas sector, our order book and profitability have been adversely impacted by the sharp and subsequently prolonged drop in the price of oil.

"This is a fundamentally strong business, but we have to take decisive action to position it for future growth, with a structure that is simple, efficient and effective."

The layoffs are part of a two years-in-the-making strategy to focus on improving competitiveness by reducing corporate and administrative costs.

Makinen added, "We will sharpen our focus on the marine technologies of tomorrow by significantly increasing our current rate of investment in research and development."

Rolls-Royce expects its strategies will generate full year savings of £40 million ($65 million) and incremental benefits from 2016 onwards, with most of the initial savings to be invested in R&D activity.

Makinen concluded, "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."

Rolls-Royce is a major force in technological development, with a recent example being its lead in a new €6.6 million ($7.23 million) project working toward autonomous ships, known as the Advanced Autonomous Waterborne Applications Initiative.