VIRUS OUTBREAK

Rolls-Royce to cut quarter of Singapore workforce

Estimated 240 affected staff mostly in technical roles; company earlier announced worldwide reduction of 9,000 jobs

Singapore

BRITISH engine-maker Rolls-Royce will shed 24 per cent of its workforce in Singapore amid expectations that demand for civil aerospace engines and aftermarket services will take several years to recover from the effects of the pandemic.

Two hundred and forty - mostly technical - roles will be affected starting mid-August as a result of a global restructuring, the company told The Business Times. The lay-offs come after the engineering giant announced in May that it would slash at least 9,000 jobs worldwide, or over 17 per cent of its global headcount.

Rolls-Royce employs about 1,000 people in Singapore, where it manufactures fan blades as well as carrying out assembly and testing of its engines at Seletar Aerospace Park. This excludes its maintenance, repair and overhaul (MRO) joint venture with SIA Engineering Co, known as Singapore Aero Engine Services.

Bicky Bhangu, president of Rolls-Royce for South-east Asia, Pacific & South Korea, said: "The decision to remove jobs is never an easy one and is not an action that we take lightly. However, the impact of the pandemic on aviation worldwide and in Singapore is the most significant in history. We have to take swift action in order to secure the business for future generations."

Demand in the commercial aerospace market will "take several years to return" to pre-Covid levels, he added.

Before the pandemic hit, Rolls-Royce had been planning to boost its headcount in Singapore as it sought to scale up engine production capacity this year to meet regional demand.

To help its affected employees, Rolls-Royce has been working closely with the Singapore Industrial and Services Employees' Union and NTUC's Employment and Employability Institute (e2i) to extend support in areas such as job search, career coaching and employability training. It is also engaging other companies to try to match its affected staff with roles available in those organisations.

With airlines grounding the majority of their fleet and some cancelling orders for new aircraft, plane-makers Airbus and Boeing have also announced plans for massive job cuts globally.

As international travel is still largely on hold, the outlook for both aviation and aerospace remains weak, the Association of Aerospace Industries (Singapore) (AAIS) highlighted, adding that MRO volumes have slumped by 80 per cent while half the aircraft fleet remains in storage.

Though government schemes, such as the Jobs Support Scheme, have helped to assuage some of the impact, AAIS expects many firms will be eventually forced to trim capacity to match demand, which will remain feeble for a few years.

Sia Kheng Yok, chief executive of AAIS, said: "During this period, the industry is fighting to retain its capabilities and capacity to support the eventual recovery of the Singapore air hub. This is vital for a quicker recovery of our economy."

He added that companies can use the lull period to accelerate their digital transformation efforts, reskill and upskill their staff and - if they can afford to - invest in capabilities for the future.

Private sector economists have said retrenchments in Singapore could total anywhere from 45,600 to 300,000 this year as the full impact of the pandemic hits home.

Still, a report from Maybank Kim Eng on Thursday highlighted that jobs recovery in markets such as Singapore and Malaysia will be faster vis-a-vis other regional markets, owing to "generous wage subsidies, loan support and hiring incentives for businesses".

READ MORE: Rolls-Royce burns through £3b in H1 2020