Defence company that operates Devonport Dockyard announces plans to axe 1,000 jobs
It follows a review which will also see Babcock International sell off parts of the business worth about £400m over the next 12 months
Defence giant, Babcock International, has announced plans to axe 1,000 jobs in the UK and overseas.
The firm, which operates Devonport Dockyard, issued an update to shareholders on Tuesday (13th April).
The group employs 30,000 people worldwide - most of them in the UK.
The cuts are expected to affect around 850 jobs in the UK.
Babcock says it is "reducing layers of management" to "create a business that is more efficient and effective".
A recent review identified £1.7 billion in impairments and charges, understood to have been written-off.
That will also see Babcock sell off parts of the business that are worth around £400 million over the next 12 months.
The restructuring will have a one-off cost of around £40 million and the company says that it expects to save around the same amount annually.
"We are changing our operating model to create a business that is more efficient and effective.
"We are reducing layers of management within the business to form a simpler, flatter structure that will simplify how we operate, improve line of sight, shorten communication lines and therefore increase business flexibility and our responsiveness to market conditions.
"This will reinforce a one company culture and remove the duplication and lower quality delivery that a siloed approach delivered. This, unfortunately, will result in headcount reductions. We are also reducing the Group’s property portfolio, especially in the UK.
"The changes will result in approximately 1,000 employees leaving the Group within the next twelve months with an approximate restructuring cost of £40 million, most of which are cash costs.
"This will reduce our overall operating cost base. Some of the savings will be recognised across long term projects, for example where they form part of existing contract efficiency assumptions, and some savings will benefit our customers via the contract structure.
"As such, the expected realisable annualised savings are approximately £40 million".
Babcock International
It is unclear how the proposed cuts will affect workers at Devonport, but we have contacted Babcock for a statement.
You can read the update issued to shareholders on Tuesday 13th April here.