Manufacturers
Rolls-Royce CEO announces next round of management cuts
September 23rd 2016
British engine maker, Rolls-Royce, under the leadership of Warren East, continues to trim its executive fat. The OEM announced 200 management positions would be eliminated at the company as part of the CEO’s radical restructuring plan. Read More » The Financial Times reported this week that almost 700 middle managers had been made redundant at the Derby-headquartered company since the beginning of this year. The job evaporation follows the loss of almost 3,000 staff in the company’s civil and marine divisions under East’s predecessor, John Rishton.
Intent on improving the group’s competitiveness compared with U.S. rival, General Electric, East has the job of reversing the company’s record of five profit warnings since 2014. The CEO and his refreshed management team believed the company could save another US$1.39 billion by improving efficiency and introducing more cost cutting. Overall, the planned and present restructuring is intended to provide £150-200 million ($195-$260 million) in annual savings by the end of next year.
Rolls-Royce has enjoyed significant sales success with its new engines and as a result must increase its production by almost double, to about 600 engines a year, to meet its orders from airline customers, of which several are from the Asia-Pacific and the Middle East. In the last five years, the company has reduced its employees by seven per cent, to 51,500, but is also investing in staff with digital and nuclear engineering skills, the Financial Times said.
