British aircraft engine manufacturer Rolls-Royce is cutting at least 9,000 jobs due to collapse in demand for air travel caused by the coronavirus pandemic.
"We are proposing a major reorgsation of our business to adapt to the new level of demand we are seeing from customers. As a result, we expect the loss of at least 9,000 roles from our global workforce of 52,000," the company said in a statement on its website.
The proposed reorgsation is expected to generate annualised savings of more than 1.3 billion pounds, of which we expect headcount to contribute around 700 million pounds, said Rolls-Royce.
The cash restructuring costs related to these actions are likely to be around 800 million pounds with outflows incurred across 2020 to 2022.
The impact of Covid-19 on Rolls-Royce and the whole of the aviation industry is unprecedented, said the company. It is, however, increasingly clear that activity in the commercial aerospace market will take several years to return to the levels seen just a few months ago.
"We must now address these medium-term structural changes, as demand from customers reduces significantly for our civil aerospace engines and aftermarket services."
Chief Executive Officer Warren East said the strategic choices the company has made over the last few years helped it to respond rapidly to Covid-19.
"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," he said in a statement.
"We have emerged from troubled times before, to achieve incredible things. We will do so again."
Global aviation is facing the worst crisis in its history with airline passenger revenues expected to be cut in half this year.
This has dealt a huge blow to planemakers and other aerospace compes. Airbus and Boeing have both announced deep cuts to production and jobs, as airlines scale back orders for new planes.
( With inputs from ANI )