Rolls-Royce to Cut More Jobs

LONDON—Rolls-Royce Holdings PLC on Thursday said it would cut more jobs as Chief Executive Warren East slowly rolls out restructuring steps aimed at rebuilding investor confidence in the British engine maker after a series of earnings disappointments.

Senior management is being restructured, and that "will result in a small number of people leaving the business," the London-based company said.

Rolls-Royce, which makes plane engines for Boeing Co. and Airbus Group SE planes, previously said it would cut more than 3,000 jobs in the aerospace and marine businesses. Additionally, the company last month announced a streamlining of management and the departure of two of the companies top executives.

The latest cuts are part of a program announced in November to try to generate £ 150 million ($216 million) to £ 200 million in annual cost savings beginning in 2017. The company hasn't yet spelled out the costs of the program.

Mr. East has so far failed to stem the decline in Rolls-Royce shares since taking over more than six months ago. The stock is down more than 37% since he joined in a period that also seen Rolls-Royce issue two more profit warnings.

Rolls-Royce competitiveness has lagged behind such rivals as General Electric Co. after previous cost cuts failed to boost profitability. A more recent slump in demand for its ship and plane engines has forced the company to lower investor expectations.

Mr. East has said in the past that a turnaround wouldn't be quick.

Rolls-Royce faces investor pressure to act. U.S. activist investor ValueAct Capital Management LP has become its largest shareholder and is seeking a board seat.

Neil Woodford, a highly regarded British investment fund manager who has held Rolls-Royce stock for almost a decade, last year said he lacked confidence in the engine maker's near-term prospects as he announced his CF Woodford Equity Income Fund and the Woodford Patient Capital Trust fund had sold their shares.

Write to Robert Wall at [e-mail]

(END) Dow Jones Newswires

January 28, 2016 16:05 ET (21:05 GMT)

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