Downsizing hits Rolls-Royce, BAE Systems

Defence and aerospace group Rolls-Royce is planning to reduce around 140 jobs in the UK, as part of its decision to reduce up to 2,000 jobs worldwide while anpother defence major BAE Systems said it planas to reduce 200 jobs at different locations on account of activity 'tailing off'.

Rolls-Royce has already made 2,300 positions redundant this year, and is said to be taking this step after re-looking at the impact of the existing ''economic uncertainties".

The reduction at Rolls Royce is likely to affect its assembly and test facility in Derby. The company employs 39,000 globally, with 60 per cent of its workforce being in the UK.

The number of redundancies announced by major corporations in the UK has now notched up to over 25,000 within just two weeks of the economic downturn worsening.

Rolls-Royce chief executive Sir John Rose said the company is ''determined to maintain'' its focus on cost reduction and competitiveness ''as the world economy enters a challenging period."

The scale and locations of the remaining 1,500 to 2,000 redundancies at Rolls Royce, marking around four per cent of its workforce, would be finalised in 2009.

BAE and Rolls-Royce say falling demand for aerospace and defence manufacturing is the main reason for the layoffs. While Rolls-Royce shares have halved in value thus far this year on account of its exposure to the limping aerospace industry, BAE systems is reducing 200 jobs at plants in Newcatle, Leeds, Leicester, Burrow and Telford on account of activity 'tailing off'.

BAE's shipbuilding joint venture BVT is also reducing administrative positions by 300, even though BAE said natural wastage and vacancies would mean that it would only need to implement 135 redundancies. BVT was formed with the merger of VT Shipbuilding with BAE's surface shipbuilding operations. It is involved in the construction of two new aircraft carriers and destroyers for the Royal Navy. BVT says the job losses could be attributed to reducing duplication between the merged companies.
 
Delays to aerospace programmes such as the Airbus A380 and the Boeing 787, and to defence programmes like the Future Rapid Effects System armoured vehicle, which have been held up under ministry reviews of the UK's defence budget, have impacted the two firms.

Pharmaceutical company AstraZeneca, which is the UK's second largest pharma company, is reported to be set to cut 1,400 jobs worldwide in a bid to improve efficiency in manufacturing and supply chain operations.