Rolls-Royce said on Thursday that around 800 jobs will be cut as the company continues the transformation of its Marine business.
The company said that the further simplification of the structure of the business, that includes LNG solutions and gas engines for the merchant, offshore and naval vessels, comes as a result of continuing weakness in the maritime market.
In its statement, Rolls-Royce said that the streamlining of the senior management team, and a series of cost reduction initiatives will result in the loss of around 800 roles worldwide, but bring an estimated £45-50 million (Approx: US$56.6-63 million) of annualised savings from mid-2017.
As part of the program, investments are also being proposed to establish an R&D center for the development of new propulsion products, and an expanded Services hub for Northern Europe, both in Ulsteinvik, Norway.
The restructuring proposals follow a series of cost reduction initiatives carried out over the past three years to improve the affordability and competitiveness of the Marine business. The proposed job reductions are in addition to the reduction of 1,000 employees announced in May and October last year.
Rolls-Roys notes that it sees no signs of a recovery in offshore oil and gas markets with orders for new equipment remaining weak, resulting in expectations of further revenue weakness for the business in 2017.
1 GBP = 1.25834 USD