Rolls-Royce to Cut 2,000-2,500 Jobs Globally in Strategic Overhaul

Rolls-Royce Holdings is set to cut 2,000-2,500 jobs worldwide as part of a transformation program and strategy review.

The U.K.-based aircraft engine manufacturer, which outlined the review plan in January, said Tuesday that the new structure will create a more agile business better able to serve customers, deliver cost efficiencies, and help it improve its capabilities in areas such as procurement and supply-chain management.

“This is another step on our multiyear transformation journey to build a high performing, competitive, resilient and growing Rolls-Royce,” Chief Executive Tufan Erginbilgic said.

The engineering technology and safety teams will be merged into a single team, responsible for product safety, engineering standards, process, methods and tools. The combined team will be led by Simon Burr, currently director of product development and technology for civil aerospace, who will join the executive team with immediate effect. Enabling functions, like finance, general counsel and people teams will also be brought together.

Chief Technology Officer Grazia Vittadini will leave the company in April.

Other proposals include creating a new enterprise-wide procurement and supplier management organisation, supporting group spend consolidation, leveraging scale and developing consistent standards. As well as savings, a greater focus on these areas will lead to customer service improvements, reducing supply-chain delays.

Rolls-Royce currently employs 42,000 people worldwide.

In an interview with the Wall Street Journal in May, Erginbilgic said that his first goal was to pay down debt and generate cash to restore Rolls-Royce’s investment-grade rating—lost at the start of the pandemic. He said then he also wants to be able to reinstall payments to shareholders, that Rolls-Royce suspended in 2020.

“In every division of the group we are underperforming versus the competition,” Erginbilgic told the Journal then. “That is to me a turnaround case.”

Erginbilgic, a former oil-industry executive, took over as chief executive of Rolls-Royce Holdings in January.

On Aug. 3 Rolls-Royce reported a pretax profit for the six months ended June 30 of 1.42 billion pounds ($1.73 billion), compared with a loss of GBP1.75 billion a year earlier.

Underlying operating profit—a key metric for the company that strips out exceptional and other one-off items—was GBP673 million, up from GBP125 million.

Rolls-Royce’s latest guidance for 2023 is for an underlying operating profit of between GBP1.2 billion and GBP1.4 billion. It expects 400 to 500 total engine deliveries for the year.

OpenAI says it is scrapping the release of its next-generation AI model over safety concerns that researchers raised during internal testing, in one of the clearest signs so far that agent misbehavior could stymie the industry’s rapid progression.

The move follows a summer punctuated by reports of artificial-intelligence systems industrywide going rogue, and marks a rare case of a major AI developer ditching a new release because of safety concerns.

The company had planned to launch the model, known as GPT-6.1 Astra, in the coming days or weeks, aiming for an October debut. The model was more capable than the company’s previous models in completing challenging tasks from end-to-end without human assistance, as well as writing.

The company instead will focus on improving the safety of future models, which it expects to be even more capable.

Saachi Jain, OpenAI’s head of safety systems, said in an interview that GPT-6.1 Astra regressed in two areas. Compared with its predecessor, GPT-6 Astra, the model performed poorly on tests measuring alignment, or how well the model adheres to what humans would like it to do. Specifically, GPT-6.1 Astra showed higher levels of deception: It wasn’t always honest about telling users of the actions it did or didn’t take.

Another issue was what OpenAI calls “scope authorization,” meaning that GPT-6.1 Astra would push ahead on a task without asking the user for permission, and would at times reach for external tools and services even if it might be unsafe.

“For anything regarding safety and alignment, there’s a trade off,” Jain said. “You really do need to find what’s the right line between staying within scope, but also avoiding laziness in terms of how the model actually pursues tasks even when it hits friction.”

OpenAI CEO Sam Altman attended a United Nations Security Council meeting about AI last week. Alexi J. Rosenfeld/Getty Images

While GPT-6.1 Astra improved in areas such as “model laziness,” Jain said it didn’t quite meet OpenAI’s bar for safety and alignment, so the company decided not to launch the model publicly.

The announcement comes one day ahead of OpenAI’s annual developer conference in San Francisco. In the past, OpenAI has used the conference as an opportunity to launch new models and services that reduce costs for software developers—a segment the ChatGPT-maker competes with rival AI company Anthropic to win over.

In recent weeks, OpenAI and Anthropic have called on industry partners to slow down the development of cutting-edge AI models and invest in safety standards, noting they will temper the pace of their own internal AI progress.

OpenAI says it is working to investigate a range of agent security incidents that it has discovered in recent months, and address the safety issues underneath them. As part of the work, the company has implemented a new monitoring system to catch AI-agent misbehavior more quickly, and started requiring engineers to use stronger security guardrails for testing its AI systems.

Earlier this summer hundreds of OpenAI’s internal agents, which were tasked with completing a cybersecurity test, ended up hacking into the AI company Hugging Face. Since then, high-profile organizations such as the Australian government and United Nations discovered that OpenAI’s agents used similar, but less extensive, techniques to gain access to their websites.

Many of the publicly known agent-security incidents involved OpenAI’s internal AI models that were never slated for public release.

Last week, OpenAI said it paused training on its most capable AI models after an AI agent slipped through a gap in the company’s internet restrictions to query a public chatbot. The company said its new monitoring systems flagged the incident within 15 minutes, and training on these models remains paused.

GPT-6.1 Astra isn’t one of those models, but a different case, the company said.

“We want to make sure our model development is safe no matter whether that’s in the company, or when we ship it to users,” Jain said. “But when we ship it to users, we have an extremely high bar in terms of safety and alignment.”

While the company decided not to ship GPT-6.1 Astra, it hopes to use the same base model to do additional reinforcement learning runs, and create future generations of its GPT-6 models.

OpenAI plans to conduct several deep dives to identify the root cause of the problems identified in GPT-6.1 Astra, Jain said. The work includes ensuring that OpenAI’s reinforcement learning environments are rewarding the right type of behavior, Jain added, though she noted the company would investigate all stages of model development.

AI companies have begun to draw scrutiny from policymakers and public officials, who are paying attention to the rapid development of the technology. Later this week, a Senate subcommittee is holding a hearing with third party AI researchers titled, “Rogue AI: Securing the Homeland Against AI Agent Attacks.”

Florida Attorney General James Uthmeier, a Republican, sued OpenAI in June, claiming that the company and Chief Executive Sam Altman knowingly released an unsafe product and ignored warnings that it could harm users.

In a motion for temporary injunction filed Monday, Uthmeier sought to prevent OpenAI from developing new AI models without third-party approved safeguards, stop ChatGPT from soliciting user engagement and limit the company’s ability to advertise ChatGPT as safe.

Tech companies claim they “cannot stop barreling forward with their potentially civilization-ending endeavors unless they are forced to do so by the government,” Uthmeier said in the filing. “The Florida Attorney General is answering your cry for help.”

An OpenAI spokeswoman said that people want to know AI is being developed safely, “and that starts with what companies like ours do ourselves.”

“Governments have an important role to play in setting robust safety standards for AI, and we’re committed to working with Florida and other states on advancing pragmatic AI policies that apply to the entire AI industry—not just one company,” she said.