London, 16 December 2015: Rolls-Royce will revamp its management structure and recruit a chief operating officer as Warren East strives to revive the ailing company.Â Tony Wood, the head of aerospace, will depart, and Lawrie Haynes, who runs the land and sea division, will step down next year.Â The changes, reported by the Financial Times, are expected to be announced on Wednesday.Â Removing the top layer of management is a bid to simplify decision-making.Â Rolls-Royce has issued a series of profit warnings that have battered its share price, leaving it down 38% this year.
Mr East, who joined in July, admitted last month that the engineering group had developed an “accounting fog” that had left investors unclear about its direction.Â He wanted to make Rolls-Royce a “simpler” and more responsive business and cut its 27 management structures that dealt with different types of technology to just eight.
“We are going to rewrite the operating system for the company,” Mr East told the FT.Â “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.”Â Rolls-Royce employs more than 21,000 people in the UK, with more than 12,000 employed at its Derby aerospace engines and submarines division.
Earlier this year, the company announced 3,600 job cuts and warned that some of its 2,000 senior managers would depart.Â The crisis claimed the scalp of John Rishton, whom Rolls-Royce said in April would step down after four years as chief executive.Â The company makes engines for the UK nuclear submarine fl
eet. It was reported this week that the government had drawn up contingency plans should Rolls-Royce’s problems become so acute that it faced being broken up.
The FT report suggested that could even mean taking Rolls-Royce’s nuclear business into public ownership.Business minister Anna Soubry told the House of Commons that the government was “monitoring the situation carefully” but did not elaborate.The next generation of nuclear submarines, due to be deployed by 2030, is being planned by the government.