Rolls-Royce Holdings has announced that it is expanding its job cuts. The British company which makes power systems for the aviation and other industries said it will cut more than 200 jobs at the middle management level.
The move is part of a larger restructuring programme announced by CEO Warren East in November 2015. It aims at rebuilding investor confidence in the engineering company after a series of earnings disappointments. It is expected to save between £150m ($195.53) and £200m annually beginning 2017.
The current job cuts follow 400 management positions Rolls-Royce said it would eliminate in May. This takes the total trimming of management positions under East's leadership to more than 600. Overall, including job cut announcements across all levels, the latest move takes the total redundancy count to about 4,000 in less than two years.
While the current job redundancies will be across the group, most of them are said to be at the company's aircraft engine business division, which has clients such as Boeing and the Airbus Group. This division has already seen about 2,600 other job cuts being announced.
The Financial Times cited an unnamed company insider as saying that the move brings to an end the first stage of the restructuring programme that was aimed at streamlining the senior and middle management levels. The source added that additional job cuts could not be ruled out as the company continues to seek efficiencies wherever possible. Further redundancies could be done on a voluntary basis wherever possible, the source added.
The move comes ahead of a meeting scheduled in November, where East is expected to update investors on further savings in the next stage of his restructuring plan in order to increase the group's competitiveness. It also comes at a time when the company is planning to double the annual production of its jet engines to meet demand for Boeing 787 Dreamliner planes and the Airbus A350.