Rolls-Royce is to cut 4,600 managerial and support jobs as the jet engine maker introduces its latest restructuring plan.
Most of the jobs will be axed in the UK, where the FTSE 100 company employs 23,000 out of a global workforce of 50,000.
A third of the jobs are expected to go by the end of this year and the rest by the middle of 2020.
Rolls-Royce chief executive Warren East signalled the move in March as the company battled to keep to its financial targets and amid problems with its Trent 1000 engines.
It has replaced the fan blades on turbines powering Boeing 787 airplanes after cracks and corrosion were found on jets operated by Japan’s ANA airline.
Mr East said: “It is never an easy decision to reduce our workforce, but we must create a commercial organisation that is as world-leading as our technologies. To do this we are fundamentally changing how we work.”
“These changes will help us deliver over the mid and longer-term a level of free cash flow well beyond our near-term ambition of around £1bn by around 2020,” he added.
The latest restructuring plan will cost the company £500m and is expected to save it as much as £400m a year by the end of 2020.
Rolls-Royce has already seen around 600 managers leave since 2015 under a previous cost-cutting programme initiated by Mr East. This is the biggest cull since 2001, when 5,000 jobs were cut, including 1,000 contractors.
Rolls-Royce’s UK bases are in Derby, Bristol, Barnoldswick (Lancashire), Ansty (Warwickshire), Hucknall (Nottinghamshire), Inchinnan (Renfrewshire) and Sunderland, as well as London.
Derby North Labour MP Chris Williamson said the move represented a “failure” of capitalism.
“When I left school in Derby in 1972 Rolls-Royce employed around 35,000 people, today it’s just under 12,000, if these job losses go ahead the workforce will reduce to around 8,000,” Mr Williamson said.
“Isn’t it time that we saw the government legislating to have workers on the boards of companies so there is somebody there to represent the interests of the workforce because at the moment we’re seeing an expanding company, expanding order books and yet the workforce is diminishing.”
Unite assistant general secretary Steve Turner said: “This announcement will be deeply unsettling for Rolls-Royce workers and their families and could have a dire economic impact on local communities reliant on Roll-Royce jobs.
“There is a real danger that Rolls-Royce will cut too deep and too fast with these jobs cuts, which could ultimately damage the smooth running of the company and see vital skills and experience lost.”
Earlier this week, the company said it had identified more “durability issues” with some engines which would “incur some additional costs.”
Before the latest issues, it had expected a £340m hit for this year to cover the cost of carrying out repairs on existing engines. The company is also compensating airlines for the repairs and leasing replacement aircraft.
The Federal Aviation Administration (FAA), the civil aviation watchdog in the US, warned operators of the 787 to fly within 60 minutes of an airport in case of an emergency.
Shares in Rolls-Royce rose 3.5%, or 27p, to 855p in early trading.