Rolls-Royce to axe 800 jobplaces in marine division

Engine maker Rolls-Royce is axing 800 jobs in its marine division as weakness in the struggling oil and gas sector takes its toll. The UK-based firm said it was too early to say where the jobs axe would fall.

Its marine business employs 4,800 people globally with around 400 in the UK, of which half are based in Bristol and the remainder across offices in the Midlands and a manufacturing site in Dunfermline, Scotland.

Rolls said the job cuts will be made next year as part of an overhaul to make annual cost savings of around £45 million to £50 million. The unit's workforce has already been slashed from 6,000 in 2015.

Rolls said in a trading update two weeks ago that it had seen no recovery in its oil and gas markets meaning further revenue weakness was expected next year.

It comes just a day after an agreement between OPEC countries to cut production – the first such deal in eight years – sent the price of a barrel of Brent crude sharply higher.

Mikael Makinen, president of the marine business at Rolls, said: "The ongoing market weakness that has followed the dramatic fall in the price of oil continues to have an adverse impact upon our order book and profitability.

"Reducing our workforce is never an easy decision, but we have no option but to take further action beyond the changes we have made to date."

Rolls is undergoing a group-wide restructure under boss Warren East after falling profits. Costs are being cut across the group and it confirmed last month that it was set to deliver savings at the top end of its target of between £150 million to £200 million.