Rolls-Royce has reported a record loss of £5.4bn in the first half of the year, after a decline in international travel during the pandemic led to to a slump in demand.
The engine maker said it had originally expected to manufacture 450 engines during 2020 but now planned to deliver only 250.It predicted that demand for its products would remain below 2019 levels until 2025.
The grounding of passenger jets also meant flying hours were halved - hurting the company's revenues as airlines pay it based on how much they use the engines.
The firm is in the middle of the biggest restructuring in its history, which will reduce the number of sites it has worldwide from 11 to six. Shares were also down 8% on Thursday.
Rolls-Royce chief executive, Warren East said that the restructuring has caused the firm to make difficult decisions, resulting in an unfortunate but necessary reduction in roles.
"These actions will significantly reduce our cost base, which, combined with recovery in power systems and continued resilience in defence, will help us to deliver significantly improved returns as the world recovers from the pandemic,” he said.
Rolls-Royce employs 50,000 people around the world, about half of them in the UK.
The company said in May that it planned to cut 9,000 jobs - nearly a fifth of its global workforce - due to the pandemic. So far, 4,000 employees have been made redundant.
The company said 2,500 of its workers in Britain had applied for voluntary redundancy or agreed to take early retirement,which has substantially reduced compulsory redundancies.
Wide-body engine assembly and testing, which is currently carried out at three global sites, will be consolidated at its main site in Derby.
Around 6,000 are ultimately expected to go in the UK and the company has already said 1,500 will be affected at sites in Derby and Nottinghamshire, plus 350 at Barnoldswick in Lancashire.
Despite these self-help measures, Rolls-Royce still made a £1.7bn operating loss in the first half of the year. On top of that the decline in airline flying means it can no longer expect a large chunk of US dollar revenues,and as a result, has had to shut down some of its hedge trades early. The cost is £2.5bn.
It now plans to sell Spanish unit ITP Aero and other assets to raise at least £2bn.