More Rolls Royce job cuts

Rolls-Royce is eliminating more than 200 positions from its management team as chief executive Warren East extends a wide-reaching restructuring of the embattled engine maker.

The additional cuts brings the total trimming of management positions under Mr. East’s reign to more than 600. 

About 270 of those positions had been phased out as of July 28, the CEO said at the company’s half-year earnings report.

Rolls-Royce has been struggling amid a downturn in demand for marine engines and servicing revenues from its business jet turbines. 

The company targets savings of £30m-£50m this year as part of a broader restructuring effort aimed at cutting spending by £200m by the end of 2017.

The goal is to match margins achieved by competitors Pratt & Whitney and GE implying savings of as much as £1bn.

The latest push “involves restructuring our management population and will result in a number of people leaving the business,” Rolls-Royce said in the statement.

“This is part of our ongoing transformation programme, designed to remove complexity and cost by simplifying our processes and our structure.”

Mr. East, who took over the leadership role from predecessor John Rishton in July last year, has said the enginemaker has suffered from a bloated management team and overly complex decision-making procedures.

The leadership change came as Rolls-Royce entered a demanding ramp up of engine deliveries for Airbus’ A350 XWB and A330neo aircraft, that will see the manufacturer double its output of engines to meet demand.

Last year the company said its average annual employee numbers had dropped by 3,600 to 50,500 in 2015. 

The company has separately announced 2,600 staff cuts in its aerospace business and 1,000 in its marine business, which supplies engines mainly to the oil and gas industry.

At the same time the company, which on Friday was awarded a contract to develop Britain’s first nuclear plant in three decades, has doubled its employees in its nuclear business since 2011.

Rolls-Royce took £53m in restructuring charges in the first half of the year, with its expectations for a full-year hit on profits of between £75m and £100m unchanged, the company said at the weekend. 

The stock has climbed 30% this year, valuing the company at £13.6bn and was up over 1.5% yesterday.


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