Rolls-Royce Plc announced details of the next stage for its ongoing restructuring process, which will cost 4,600 jobs over the next two years. The effort to streamline the organization and improve revenues, margins, and cash flow has been underway since 2014. According to CEO Warren East said: “We have made progress in improving our day-to-day operations and strengthening our leadership, and are now turning to reduce the complexity that often slows us down and leads to duplication of effort. It is never an easy decision to reduce our workforce, but we must create a commercial organization that is as world-leading as our technologies. To do this we are fundamentally changing how we work.”
These new details of the restructuring mean Rolls will reduce its employment by 10%, mainly in its English operations, but will not affect the group’s engineering activities, according to remarks made by East.
Noting that the organization has operated with overlapping activities between individual business units and a large corporate center, Rolls indicated now it will shift the “center of gravity much closer to our customers.” That reaffirms the decision announced earlier this year to organize three, largely independent business units — Civil Aerospace, Defence and Power Systems.
“We will be significantly reducing the size of our corporate center to remove the complexity and duplication,” according to Rolls’ announcement. “A traditionally heavily centralized control culture will be replaced by empowered businesses, in a simpler, leaner structure with much clearer accountabilities. This will foster quicker decision-making throughout the organization.”
The group emphasized its progress in developing and introducing new technologies over the past decade, including the Trent XWB and Pearl 15 civilian aircraft engines, and its ongoing £11-billion ($14.5 billion) capital-investment program, much of which is in response to growing demand for large engine production.
“We have amassed orders for over 2,700 aero engines for wide-body aircraft and business jets. We are currently undertaking our biggest ever increase in large engine production, targeting over 600 wide-body engines a year by the end of this decade. As a result of our innovation and investment, we are poised to become the world-leader in large aircraft engines, powering over half of the world’s passenger wide-body fleet within the next few years,” Rolls asserted.