Rolls-Royce Plans 'Major Restructure' In Bid To Save £200m A Year

Rolls-Royce Plans 'Major Restructure' In Bid To Save £200m A Year

Embattled engine-maker Rolls-Royce is planning to slash costs by up to £200 million a year in a bid to revive its fortunes.

The firm issued its fifth profit warning in less than two years earlier this month as a result of weak demand, and the new boss is set to outline plans for a "major restructure" on Tuesday afternoon.

Warren East, who only joined the firm in the summer, said the changes will include job cuts to senior management, a reduction in fixed costs and greater pace and accountability on decision-making.

Mr East said he is hoping the changes will achieve gross cost savings of between £150 million and 200 million per year, with benefits accruing from 2017.

"As a group we are undergoing an unprecedented period of change," he said.

"My review has underpinned my confidence about the opportunities before us and I am convinced that our long-term outlook is positive.

"It has also highlighted a number of areas where we can simplify the way we work, inject pace into our decision-making and responsiveness, and improve our operational gearing and operational effectiveness.

"This is fundamental to ensuring Rolls-Royce best positions itself to compete for the long-term opportunities before us."

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