Rolls-Royce will cut at least 9,000 jobs and could shut some of its factories.
The jet-engine maker made the announcement Wednesday (May 20), and said the cuts were to cope with a severe decline in air travel.
Aerospace engineering is the key part of Rolls-Royce business.
It supplies engines to both Boeing and Airbus, and is paid by airlines based on how many hours they fly.
Its earnings are thus certain to take a hit if air travel demand takes years to recover from the global health crisis.
Rolls-Royce relies on aerospace for just over half its annual revenues.
In 2019, that totalled around 15 billion pounds – or $18 billion.
The company said the job cuts would mostly be in its civil aerospace unit, and could generate annual cost savings of around $1.6 billion.
CEO Warren East indicated the majority of jobs cuts will be in the UK where most of its aerospace employees are based.
In total, Rolls-Royce hires 52,000 people worldwide and stands to lose 17% of its workforce after Wednesday’s announcement.