Rolls-Royce Restructuring.jpg Rolls-Royce

Civil Aerospace Gains Autonomy From Rolls Restructuring

The British engine maker revealed plans for a major reorganization on June 14.

Engine manufacturer Rolls-Royce plans to cut 4,600 jobs over the next two years in a bid to streamline operations and improve profitability.

The layoffs were deeper than expected and will fall mostly in the United Kindgom, where 3,000 jobs are set to go.

Ground zero of the restructuring is Rolls-Royce’s Derby headquarters, where a heavily centralized management structure is to be unpicked to give more autonomy to the company’s three business units: civil aerospace, defence and power systems.

Each will become fully accountable for the delivery of its strategic and financial targets, as well as for the support it needs.

“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,” said chief executive Warren East.

With middle management rather than engineering roles in the firing line, Rolls-Royce has said the job cuts will not affect ramp-ups across its civil engine programmes will be affected, nor will it remove any resources from supporting the troubled Trent 1000 programme.

Last week the manufacturer revealed that problems affecting the Trent 1000 Package C engine had also been detected on the Package B model.

However, it has left is free cash flow guidance for 2018 unchanged at £350 million to £550 million.

The goal of its restructuring – which is expected to costs £500 million – is to achieve free cash flow of roughly £1 billion by around 2020.

About 1,500 jobs are expected to go before the end of this year, although Rolls-Royce has promised no compulsory redundancies of unionized staff.

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