Rolls-Royce cuts senior management layer as chief executive Warren East tries to steady the firm

Catherine Neilan
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roubled engineering firm ​Rolls-Royce is to strip out an entire layer of its senior management team - resulting in the departure of two executives - as part of plans to cut costs and get the business back on track.

The business, whose share price is down 37 per cent for the year, will cut its aerospace and land & sea divisions. From 1 January the company will have five market-facing businesses, with the presidents of civil aerospace, defence aerospace, marine, nuclear and power systems reporting directly to chief executive Warren East.

Rolls-Royce will merge its civil large engines and civil small and medium engines businesses into one, called civil aerospace.

Eric Schulz, currently president of the former, will become president of the combined division, while Chris Cholerton will continue as president of defence and Mikael Makinen will continue as president of marine.

Harry Holt, currently group operations strategy director, has been appointed as president of nuclear and Dr Ulrich Dohle will continue as chief executive of Rolls-Royce power systems. A new chief operating officer will also join the team in the new year.

As a result, aerospace president Tony Wood and Lawrie Haynes, president of land and sea, will both leave the company. They will work into 2016 "in order to assist with the transition to the new structure".

Colin Smith will be moving from his role as group director of engineering and technology to group president, joining the board and reporting directly to East. He will be succeeded by Chris Barkey, currently engineering director of civil large engines.

"The new structure will clarify executive accountabilities, intensify leadership focus on operational performance and allow Rolls-Royce to build on its world-class engineering capabilities," the company said.

It is hoped the restructure will contribute towards its aim of making £150m-£200m savings each year from 2017.

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."

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