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Rolls-Royce jettisoned a whole layer of senior management in a bid to save the business

Dec 16, 2015, 13:13 IST

Martin-Baker

Rolls-Royce CEO Warren East has stripped out a whole layer of senior management in a radical restructuring of the business.

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East has clarified reporting lines and split the engine-making group into five sections, from two, as he fights to get the struggling engineering firm back on track.

Rolls-Royce said in a statement on Wednesday: "The current divisional structure of Aerospace and Land & Sea will end, removing a layer of senior management."

From 1 January 2016, Rolls-Royce will operate as five market facing businesses, with the Presidents of Civil Aerospace, Defence Aerospace, Marine, Nuclear and Power Systems reporting directly to the Chief Executive."

The company is under pressure from investors to make changes following five profit warnings in the past year and a half. American hedge fund and angel investor ValueAct, already the company's biggest investor, increased its stake in Rolls to 10% last month, and reportedly demanded a seat on the company's board.

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The Financial Times reported on Monday that the government has drawn up plans to nationalise Rolls-Royce's nuclear submarine business if things get any worse for the company.

Alongside profit warnings, shares in the firm have lost half their value from May this year. Here's how that looks:

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East said: "The changes we are announcing today are the first important steps in driving operational excellence and returning Rolls-Royce to its long-term trend of profitable growth.

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