Rolls-Royce set to undergo major restructuring


Rolls-Royce has announced a major restructuring plan

Rolls-Royce has evaluated its strategic options which will see a reduction from five operating businesses to three core units based around civil Aerospace, defence and power systems.

As part of the plan, the company aims to consolidate its naval marine and nuclear submarines operations within its existing defence business, and civil nuclear operations within its power systems business.

This will facilitate a more fundamental restructuring of support and management functions in particular.

Chief Executive Warren East said: “Building on our actions over the past two years, this further simplification of our business means Rolls-Royce will be tightly focused into three operating businesses, enabling us to act with much greater pace in meeting the vital power needs of our customers. It will create a Defence operation with greater scale in the market, enabling us to offer our customers a more integrated range of products and services.

“It will also strengthen our ability to innovate in core technologies and enable us to take advantage of future opportunities in areas such as electrification and digitalisation.

“Alongside the simplification into three operating businesses, we must continue to address the cost and complexity of the structures that support and serve these businesses, including our corporate head office, with greater decisiveness.

“Taking this action now will help secure the long-term benefit for our business and stakeholders of the growing cash flows that will be generated over the coming years. At the same time, our operational teams must continue to focus on managing in-service issues within Civil Aerospace and delivering the current increase in engine production.”

The company has stated that the actions are designed to align its business more closely with its strategic vision to pioneer cutting-edge technologies that deliver vital power, allowing better capitalisation on its relationships with defence customers and its market leading widebody position within civil aerospace.