Rolls-Royce, a top performer this year on the back of sweeping cost cuts and the return of air travel, is to axe thousands of jobs under its long-term turnaround plan.
The move was well-received in the City but one analyst warned that "the challenge is not to sacrifice quality in the quest to save a few quid".
Unite the union criticised the plan that leaves nearly 600 workers at Inchinnan in Renfrewshire in limbo until a decision is made on where the axe will fall.
The company upgraded its estimates for full-year underlying profits in August.
Tufan Erginbilgic, who was appointed chief executive in January, taking on the role after Warren East, said the shake-up will make the Derby-based giant "a more streamlined and efficient" business.
The aerospace engineering specialist, which currently employs 42,000 people, said it also plans to remove "duplication" and deliver cost efficiencies through the latest stage in its transformation plan.
Around half of its current workforce is based in the UK.
INSIGHT: Rolls-Royce workers in Scotland face uncertain future
The company's plan will include creating a new procurement division in order to reduce costs by leveraging the group's scale.
It also said that some back-office operations, such as human resources and finance, will be brought closer together.
Mr Erginbilgic said: "We are building a Rolls-Royce that is fit for the future.
"Our business is full of committed, talented people and I believe these changes will enable them to build greater capability in areas that are key to our long-term success.
"This is another step on our multi-year transformation journey to build a high-performing, competitive, resilient and growing Rolls-Royce."
READ MORE: Rolls-Royce profits soar as international air travel returns
The former BP executive had been expected to reveal a significant shake-up involving job cuts after describing Rolls-Royce's performance as "unsustainable" earlier this year.
The latest move comes after it axed around 9,000 jobs shortly after the pandemic after first starting its transformation plan in order turn its finances around.
Victoria Scholar, head of investment at Interactive Investor, said: "Things couldn't be going much better for Erginbilgic, who took to the helm at the start of the year.
"For years, the engine maker failed to rev up investor confidence with the stock sliding from the highs in 2014 to the trough during the challenging pandemic period.
"Now Rolls-Royce is the best-performing stock on the FTSE 100 over a one-year period, up over 200%."
READ MORE: Rolls-Royce in Scottish jobs pledge as flight demand improves
Michael Hewson chief market analyst at CMC Markets UK, said the turnaround plan “has continued apace”, adding: “It’s certainly a long way from this time last year when the incoming CEO described the company as a ‘burning platform’ and it would appear that Erginbilgic doesn’t want to sit on his laurels when it comes to making the company more efficient.
“Having announced a strategic review of the business back in February, Rolls-Royce has announced that it is looking to reduce the global headcount from 42,000 by between 2,000 and 2,500, with the focus on the core business, with engineering technology and safety being rolled up into one division.
"One notable casualty will be chief technology officer Grazia Vittadini who will be leaving the business in April 2024."
Russ Mould, investment director at AJ Bell, said: "We’ve seen the classic ‘share price moves higher on job cuts’ movement on 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."
However, Mr Mould added: “Reducing the workforce by 6% is a bold move and the challenge is not to sacrifice quality in the quest to save a few quid.”
A spokesperson for Rolls-Royce said that the next phase of its overhaul “will take place over the coming weeks through to January 2024, so we don’t yet know where many of the proposed reductions will be based”.
Sharon Graham, Unite general secretary, said: "Rolls-Royce has provided no justification why it believes these job losses are necessary."
Shares in Rolls-Royce closed up 2.1p, or 0.98%, at 215.6p.
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