Rolls-Royce to Cut More Jobs
January 28 2016 - 4:20PM
Dow Jones News
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 robert.wall@wsj.com
(END) Dow Jones Newswires
January 28, 2016 16:05 ET (21:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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