Rolls-Royce Holdings to Cut 200 More Management Roles

By Robert Wall 

LONDON -- Rolls-Royce Holdings PLC is expanding job cuts in its prolonged battle to boost profitability at the struggling British engine maker.

Rolls-Royce Sunday said it would shed 200 more management roles through a voluntary redundancy program. Those come on top of 400 management positions the company in May said it would eliminate.

The preponderance of the layoffs will come at the company's aircraft engine business, which supplies Boeing Co. and Airbus Group SE. Rolls-Royce has announced about 2,600 other jobs losses there too.

Chief executive Warren East, who took over the company last year after a series of profit warnings, has been trying to accelerate restructuring measures at Rolls-Royce, which is no longer affiliated with the luxury car maker.

Results of those efforts are still uncertain. Even though Rolls-Royce is expanding its job cuts, it still is sticking only to its target of achieving between 150 million pounds ($195 million) and GBP200 million a year in cost savings from late 2017.

The layoffs come at a tricky time for Rolls-Royce. The company is trying to aggressively boost product of widebody engines to satisfy strong demand for Boeing 787 Dreamliner planes and the rival A350 made by Airbus. Several aerospace suppliers have suffered costly missteps when they failed to meet delivery commitments.

At the same, Rolls-Royce is wrestling with falling sales and profits. Demand of some profitable older engines has fallen sharply. The prolonged slump in oil and gas markets also has hit the company's power and marine systems businesses. Rolls-Royce has also announced 400 job losses at its marine unit and is planning more restructuring.

Mr. East this year was forced to cut Rolls-Royce's dividend for the first time since 1992.

The company this month announced the appointment of Simon Kirby to the newly created role of chief operating officer to simplify how the company does business. Mr. Kirby currently runs government-owned HS2 Ltd., the company charged with building a new high-speed rail system in the U.K.

Rolls-Royce said the latest layoffs, which were first reported by the Financial Times, are "designed to remove complexity and cost by simplifying our processes and our structure."

Write to Robert Wall at [e-mail]

(END) Dow Jones Newswires

September 18, 2016 17:53 ET (21:53 GMT)

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