New Delhi: In a bid to simplify the organisational structure, Rolls-Royce’s CEO Warren East has decided to do away with the company’s current divisional structure of Aerospace and Land & Sea. This move will see early departure of the company’s Aerospace division President, Tony Wood by next year, and Lawrie Haynes, President of the Land & Sea segment has also decided to quit.
First reported by The Financial Times, Rolls-Royce will soon hive off its two divisions, and will consist of five businesses from 2016. The chiefs of the five businesses – Civil Aerospace, Marine, Defence Aerospace, Nuclear and Power Systems will directly report to the Warren East, who took over as the company CEO in July this year.
A new chief operating officer will be recruited from outside Rolls-Royce next year.
“We are going to rewrite the operating system for the company,” East had told the Financial Times, signalling that there were more changes to come. “I am sure there will be some further structural changes but we need to start somewhere. The best place to start is the executive team that will help me drive these changes through the business.”
It is believed less than a dozen staff will be affected by the changes, although not all will leave the company.
Colin Smith, director of engineering, will become group president of the company as part of the overhaul, the FT reported.
The overhaul is the first step in a plan to cut 150 million pounds to 200 million pounds ($225 million to $300 million) from Rolls-Royce’s fixed cost base after a series of profit warnings under East’s predecessor. East said in November the company was unable to respond to changing market conditions, including slowing air-passenger demand in Asia and a collapse in oil prices.