Rolls-Royce to slash jobs

By John Bowker and Martina Fuchs

LONDON (Reuters) - Engine maker Rolls-Royce will shed between 1,500 and 2,000 jobs worldwide next year and is already in talks to cut 140 posts in Britain, where several companies have announced job losses in recent weeks.

The company, which employs about 39,000 people globally, said it would make the cuts in response to delays to major aerospace projects with Boeing and Airbus, as well as the wider economic downturn.

Shares in Rolls-Royce, which supplies the defence, aerospace, marine and energy sectors, were down 1.5 percent at 263.75 pence by 12:49 p.m., valuing it at 4.8 billion pounds, having been down 4 percent in early trade.

Numis analysts said they would adjust their forecasts lower, but added that the company should ride out the downturn.

"There are very material market uncertainties which could well limit further share price recovery in the short term. However, compared to previous downturns, we believe RR is as well placed as it could be," they said in a note.

Rolls-Royce joins a growing list of major British companies to take an axe to their workforce, a trend likely to lead to a major rise in unemployment, which is already at its highest in more than 10 years.

Telecoms giant BT Group said last week it would make 10,000 job cuts, and plumbing supplies firm Wolseley is in the process of shedding over 7,000 staff, while engineer GKN has said it will cut 1,400 and broadcaster ITV 1,000.

Rolls-Royce said the proposals would have no effect on the group's 2008 financial guidance and that the cost of cuts in 2009 should be balanced by savings achieved during the course of the year.