New family of medium-speed diesel engines from Rolls-Royce © 2010 Rolls-Royce plc

Airplane engine-maker Rolls Royce Group announces major restructuring and reduction of staff in its aerospace division. The restructuring initiative is a program designed to improve operational efficiency and reduce cost across the company.

Approximately 2,600 employees will lose their jobs over the next 18 months; however, the majority of this reduction will be achieved in 2015.

Last month, the group warned that the tough economic climate meant it would have to increase its focus on costs. Chief Executive Officer John Rishton said that these actions will not be the last.' However, Rolls Royce stressed that it is investing in technology and new capacity that will enable increased output and improved efficiency, making Rolls Royce a more profitable, strong company.

For example:

A large engineering team was required for the development phase of the Trent 1000 and Trent XWB engines. Both these major programmes have now entered their production phase, reducing our engineering requirement.We have opened a number of world class new facilities, such as Crosspointe in the USA and in the UK at Rotherham and Washington, Tyne & Wear. These set new standards in productivity and efficiency and allow us to improve the competitiveness of our footprint.The organisation of our Group into two divisions, Aerospace and Land & Sea, will enable us to reduce management layers and structural cost including indirect labour.

We will work closely with employees and their representatives to achieve the necessary reductions on a voluntary basis wher possible, while making sure we retain the skills needed for the future,” said Rishton, who hopes these initiatives will help the business remains well positioned in growth markets.

Rolls-Royce employs over 55,000 people in 45 countries. Over 17,000 of these are engineers.