Rolls-Royce Holdings Plc has announced that Chief Executive Officer Warren East will be stepping down at the end of 2022, the automaker company said in a statement.
The announcement comes after a difficult years faced by the automobile behemoth, which led the engine maker through a punishing period capped by the COVID-19 pandemic. The shares fell as much as 19%, the most since the start of the pandemic.
The CEO's departure after more than 7 years at the helm comes as Rolls reportedly turned a profit in 2021, spurred by cost cuts implemented by East and a restart of long-distance travel that had eaten into jet-engine revenue. However, the company said that it expects revenue growth of less than 10 per cent and little change in the profit margin this year, disappointing their investors.
"I am proud of what we've done at Rolls-Royce. We are culturally and strategically dramatically different from the one I joined in 2015", East said as reported by Bloomberg.”
Warren East joined Rolls Royce in 2015 amidst reports that the company he inherited was riddled with waste and obscure procedures with the company's chief people officer telling investors back in 2018 that 3 employees once flew from the UK to the south of France to erect a company sign.
He battled to arrest the formerly bureaucratic company’s slide, with a restructuring which cut thousands of white collar jobs and reorganised back-office functions.
Another challenge he faced was with reliability issues on the company's engines which saw high profile customers switch suppliers, costing Rolls Royce’s billions of pounds.
The final fix to glitches with the Trent 1000 turbine were due to be made last year and the 787 Dreamliners which the engine powers on,have had their own manufacturing issues.The challenges continued with the pandemic, which forced East to sell assets and eliminate jobs to stem cash outflows.
The turbulent reign full of promise and struggles soon to be coming to an end, the board will conduct a search for a successor for East.
Warren East, CEO, commented on his decision, “It is a privilege to lead Rolls-Royce – it’s a job which I thoroughly enjoy. There have been challenges, but we have built on the cultural and organisational improvements we have made to work through them, deliver on our commitments and create a better business. We have simplified the Group, fundamentally improved our underlying operations and driven long-term change. Rolls-Royce is a dramatically different business today: a leading industrial technology company that is not only addressing the energy transition but embracing the opportunity it presents to generate substantial business growth, including through the creation and nurturing of new businesses with very significant potential. With the advances we have made, the momentum and energy we have shown and our firmer financial foundations, this is the right moment to look to the future. I am thoroughly committed to leading this business while we work towards a smooth leadership transition. The passion and skills of our people, the strength of our technologies and the depth of our relationships, give Rolls-Royce tremendous opportunities to pioneer the vital solutions our planet needs to create a net zero carbon future. This is the biggest technological shift for the Group since the arrival of the jet engine.”