Following reports that it was looking to cut 8,000 jobs earlier this month, the engine maker said on Wednesday that it was reducing its staff numbers, and will also cut spending across its factories, property, capital and other areas as it reacts to the decline in demand as coronavirus hits air travel.
The reduction in headcount, around a sixth of its total workforce and predominantly affecting the Civil Aerospace business, is expected to contribute around £700mln.
However, the cash cost related to the restructuring is likely to be around £800mln over this and the coming two years.
Chief executive Warren East said: "Our airline customers and airframe partners are having to adapt and so must we…we must take difficult decisions to see our business through these unprecedented times.”
East, who has presided over long-running problems with the group’s Trent 1000 engines with an estimated impact of £3.2bn of costs and lost forecast earnings, said the Power Systems business and ITP Aero are currently developing, negotiating and executing extensive measures to deal with the current situation.
The Defence business in the UK and US, has been robust during the pandemic and has an unchanged outlook.