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Rolls-Royce is an example of successful restructuring

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Rolls-Royce is an example of successful restructuring
June 14
09:00 2018

Representatives of the British industrial Rolls-Royce Group Plc announced the next stage of the planned restructuring. It is assumed that as a result of the optimization of working processes, the company’s staff will be cut by 4.6 thousand jobs. This is about 8% of the staff.

About one and a half thousand jobs will be eliminated before the end of this year.

We recall that the company Rolls-Royce Group Plc specializes in the development and production of equipment for aviation. The British supply engines not only for civil aviation, but also serve the needs of the military, designing and manufacturing engines for military aircraft and helicopters. There are also divisions of the company involved in the equipment manufacture for navigation and the energy sector.

Thanks to the company restructuring, it will be possible to save about 400 million pounds sterling (533 million US dollars) annually. The savings will exceed the analysts’ expectations who have calculated that as a result of the reorganization and layoffs, the company won’t get more than 250 million pounds a year.

Large share of employment cuts will affect the UK. And no wonder because 26 of 55 thousand employees of Rolls-Royce work in the territory of the island state. In connection with the staff reduction, the company would suffer one-time expenses of half a billion pounds.

We recall that in 1971, the company Rolls-Royce Limited, which was producing prestigious cars and aircraft engines from the beginning of the 20th century, was declared bankrupt. The British government decided to help the company, giving budget money and allowing the car division to become a separate company Rolls-Royce Motors.

In 1998, Rolls-Royce Motors was sold to the German automaker BMW. And now Rolls-Royce has nothing to do with the famous prestigious cars under the same brand.

Due to the efforts of the company’s management, the shares of Rolls-Royce have risen more than twice (by 130%) in the last 12 months. Investors can also hope for the further stocks growth of the British corporation.

 

The material was prepared with the participation of Katya Gordon,
a leading analyst of the brokerage company CT Trade

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