Rolls Royce to cut top jobs, restructure: Report

December 16, 20155:48 pm393 views
Rolls Royce to cut top jobs, restructure: Report
Rolls Royce to cut top jobs, restructure: Report

Rolls-Royce, the British engineering company which has issued four profit warnings in just over a year, said it was scrapping a layer of senior management in the first move by new boss Warren East to turn the business around.

Under the changes the heads of five units – civil aero-engines, defense, nuclear, marine, and power systems – will report directly to East. Tony Wood, head of aerospace, and Lawrie Haynes, head of the land and sea division, will also leave the company next year.

East, who took the helm at Rolls-Royce in July, wants to cut the company’s cost base and improve decision making in a bid to save between 150 million pounds and 200 million pounds ($304 million) a year.

A chief operating officer will be hired from outside the company next year, Rolls-Royce said in the statement on Wednesday, adding that it will provide a further update on the cost and range of the savings plan in February.

“The changes we are announcing today are the first important steps in driving operational excellence and returning Rolls-Royce to its long-term trend of profitable growth,” Chief Executive Warren East said.

Rolls-Royce has over the last two years repeatedly unnerved investors with its negative forecasts and a warning in November that it could cut its dividend.

Annual pretax profit is expected to shrink 21 percent in 2015 to about 1.28 billion pounds and the company has already said it could shrink by a further 650 million pounds next year, blaming a slowdown in servicing older aircraft engines and ongoing weakness in its marine engine business due to a low oil price.

The new structure will come into force from January 1. As part of it, Colin Smith, director of engineering, will become group president of the company, and report directly to East.

The number of people affected by the shake-up announced on Wednesday was less than twelve, a spokesman for the company said.

news source & image credits: economictimes.indiatimes.com

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