Rolls-Royce is to undertake a major reorganisation of its business, with the loss of as many as 9,000 jobs around the world.

The company said the move was necessary following the impact of the Covid-19 outbreak.

Rolls-Royce currently employs around 52,000 people.

In addition to the savings generated from job cuts, the company said it would also cut expenditure across plant and property, capital and other indirect cost areas.

The proposed reorganisation is expected to generate annualised savings of more than £1.3 billion, of which the company expects headcount reductions to contribute around £700 million.

The cash restructuring costs related to these actions are likely to be around £800 million, with outflows incurred across 2020 to 2022.

Warren East, Rolls-Royce chief executive, said: “This is not a crisis of our making.

“But it is the crisis that we face, and we must deal with it.

“Our airline customers and airframe partners are having to adapt and so must we.

“Being told that there is no longer a job for you is a terrible prospect and it is especially hard when all of us take so much pride in working for Rolls-Royce.

“But we must take difficult decisions to see our business through these unprecedented times.

“Governments across the world are doing what they can to assist businesses in the short-term, but we must respond to market conditions for the medium-term until the world of aviation is flying again at scale, and governments cannot replace sustainable customer demand that is simply not there.

“We have to do this right, which means we will work closely with our employee and trade union representatives as appropriate, look at any viable alternatives to mitigate the impact, consult with everyone affected and treat our people with dignity and respect.”

Due to the need to consult with the appropriate employee and trade union representatives, Rolls-Royce said it was not providing further details of the impact of the proposed reorganisation on specific sites, or countries, at this stage.

The restructuring announced on in June 2018 will also transition into this wider proposed reorganisation.

East added: “The strategic choices that we have made over the last few years have helped us to respond rapidly to Covid-19 and the synergies between our divisions leave us well placed to capitalise on the long-term potential of our markets.

“The world on the other side of this pandemic will need the power that we generate to fuel economic recovery.

“I absolutely believe the call for that power to be more sustainable will be stronger than ever.”

Image: Ralf Hirschberger/DPA/PA Images