President of the aerospace division Tony Wood will leave the company and president of land and sea Lawrie Haynes will retire. Both will remain in place until the new year to “assist with the transition to the new structure.”
Shares in the company responded well to the news, trading up 2.6% by mid-morning at 554p.
The move strips out a layer of management to “simplify” the structure. From 1 January 2016 the company will operate as five market facing businesses; Civil Aerospace, Defence Aerospace, Marine, Nuclear and Power Systems. Each will have a president reporting directly to chief executive Warren East.
Rolls Royce said the new structure will clarify executive accountabilities, intensify leadership focus on operational performance and allow it to build on its engineering capabilities.
The changes are part of a wider transformation programme announced on 12 November and further changes will be announced on in February 2016.
The aim is to make Rolls-Royce “a more resilient business and generate incremental gross cost savings of £150-200m per annum from 2017”.
“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,” said East. “This is a company with world-class engineering capability, strong market positions and exceptional long-term prospects.”
