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Rolls-Royce pursues restructuring
Trent 1000 TEN. © Rolls-Royce

Rolls-Royce pursues restructuring

Rolls-Royce has announced the next stage in its restructuring process, involving around 4,600 job cuts, mostly in corporate and support functions in the UK.

Rolls-Royce has announced the next stage in its ongoing restructuring programme, involving around 4,600 job cuts, mostly in corporate and support functions in the UK in a bid to achieve “improved returns, higher margins and increased cash flow”.

The news follows the company's announcement in January that it was transforming into three business units based around Civil Aerospace, Defence and Power Systems. The new round of restructuring is designed to create smaller and more cost-effective corporate and support functions, while reducing management layers and complexity, including within engineering.

Rolls-Royce plans to significantly reduce the size of its corporate centre, shifting its centre of gravity closer to the customer and making the customer-facing business units fully accountable for the delivery of their strategic and financial targets.

Around one-third of the job cuts are scheduled to occur by the end of 2018. Full implementation of headcount reductions and structural changes is scheduled for mid-2020.

Chief Executive Warren East said that, over the mid and longer-term, the changes would help to deliver a level of free cash flow well beyond the near-term ambition of around £1bn by around 2020.

The total cash cost of the restructuring is expected to be £500m, including the cost of redundancies and required systems investments to facilitate the programme. Full-year net cost savings are estimated to reach £400m per annum by the end of 2020.

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