Rolls-Royce has today announced it will be cut two of its senior management team as part of a bid to save up to £200m a year from 2017.
Tony Wood, the head of aerospace will step down, while Lawrie Haynes – who oversees the land and sea division – will do the same next year.
The company said the new structure would clarify executive accountabilities, intensify leadership focus on operational performance and allow Rolls-Royce to build on its world class engineering capabilities.
It forms part of a transformation programme designed to make Rolls-Royce a more resilient business and generate incremental gross cost savings of £150-200m per annum, with benefits accruing from 2017 onwards.
A further update on the cost and range of the programme is due to be given sometime in February 2016.
Currently, the firm operates under the two divisions: aerospace, and land and sea.
However, from January, the company will operate as five businesses, with the presidents of civil aerospace; defence aerospace; marine; nuclear, and power systems reporting directly to company CEO, Warren East.
Commenting on the restructure, 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.
“This is a company with world-class engineering capability, strong market positions and exceptional long-term prospects.”
As a consequence of these changes Tony Wood has decided to leave the company and Lawrie Haynes has decided to retire. Both will remain with the business into 2016 in order to assist with the transition to the new structure.
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East continued: “Tony has been with Rolls-Royce for 15 years, during that time he has contributed to many of the company’s most significant achievements.
“Recently he has played a lead role in positioning our Aerospace businesses for growth, launching next generation technologies and driving cultural change. Lawrie has been with Rolls-Royce for six years in a number of senior leadership positions. He has played a critical role in focusing our Land and Sea businesses on growth markets.
“His deep knowledge of mission critical engineering, and particularly of the nuclear industry has been of great benefit to the company. I would like to thank both Tony and Lawrie for their excellent support since I became CEO. The board and I wish them every success for the future.”
