Britain's Rolls Royce company, a major builder of airplane and ship engines, says it is cutting 5,000 jobs, blaming last month's terrorist attacks in the United States for a sharp decline in orders for jet airplane engines.
Rolls Royce says it foresees tough times for the airline industry for the next two years.
The company says it expects jet engine sales to drop by nearly $1.5 billion next year. Civil aviation accounts for more than half of Rolls Royce's business.
The company's chief executive, John Rose, blames the sales falloff on what he calls "the tragic events" of last month's terrorist hijackings in the United States.
Against that gloomy backdrop, the company called in union leaders Friday to announce it is cutting 5,000 jobs.
About 3,800 of those layoffs will occur in Britain. Rolls Royce has a total workforce of 4,300.
The chief of a British engineering union, Ken Jackson, told British radio he thinks Rolls Royce has overreacted, and he challenged to government to help the unemployed find new jobs. "We're fighting two wars. We're fighting on two fronts. One on terrorism and one on jobs," he said, "and we've got to win them both. And government has got to be up there in front, not just on terrorism, but also on the jobs front."
In another, more positive development for the British economy, a research group says British shoppers have continued to spend despite the terrorism fears.
The Credit Card Research Group says Britons rang up nearly $11.5 billion in purchases on their charge cards last month. That is almost 10 percent more than they spent in September of last year.