Rolls-Royce North America will cut about 400 jobs from its global defense business, most of them in Indianapolis, the company told employees Thursday.
“Our customers are responding to an environment of reduced defense budgets and are demanding greater efficiencies,” Tom Bell, president of the global defense business unit, said in a prepared statement. “While it is never an easy decision to make reductions in our workforce, it is a sign of the increasingly competitive market in which we operate that such actions are necessary to ensure we can drive new business.”
The jet engine maker hopes employees will accept buyout offers, which the company would not characterize as early retirement. The offers will be made to a mix of salaried employees and manufacturing workers, the company said.
Rolls-Royce declined to disclose the exact number of jobs that are on the chopping block at its downtown offices and Tibbs Avenue factory.
The company received tax breaks in 2012 based partly on a promise to maintain its local work force, which is about 4,600 people. The city of Indianapolis offered Rolls-Royce a $23 million, 10-year tax abatement based on retained jobs and investment in both its downtown and west-side properties. The company planned to invest $22 million in a former Eli Lilly and Co. office building dubbed Meridian Center and another $190 million in the Tibbs Avenue plant.
A company spokesman said Rolls-Royce is in compliance with that agreement, but the impact of buyouts or layoffs will have to be assessed at a later date.