FTSE 100 jet engine manufacturer Rolls-Royce shares were up to approximately 4% on Tuesday as the company announced its decision to cut up to 2,500 employees worldwide- an 8% workforce reduction.
Rolls-Royce shares were up 0.4% at the time of writing on Tuesday.
The Derby-based company employs up to 42,000 employees in up to 50 countries.
“We are building a Rolls-Royce that is fit for the future. That means a more streamlined and efficient organisation that will deliver for our customers, partners and shareholders,” said Tufan Erginbilgic, Chief Executive of Rolls-Royce.
The decision to cut employees was made in light of the company’s ongoing restructuring programme, which seeks to optimise workflow efficiency by shedding employees. Over the past 10 years, Rolls-Royce has seen more than 13,000 employees go as part of restructuring programmes.
Russ Mould, Investment Director at AJ Bell, said that “we’ve seen the classic share price move higher on job cuts’ movement in Rolls-Royce’s restructuring efforts. While not good news for people working for the engineer, cutting jobs means saving money in the future, hence why the market has given it the thumbs-up.”