Rolls-Royce replaces CFO and makes 2,600 job cuts

4th Nov 2014 14:11

Rolls-Royce chief financial officer (CFO) Mark Morris has stepped down as the company announced plans to accelerate its cost-cutting programme with 2,600 job cuts over the next 18 months.The engine maker has already appointed a replacement finance chief, promoting the CFO of its aerospace division, David Smith, former chief executive officer (CEO) of Jaguar Land Rover.The aerospace division is to bear the brunt of the job cuts, with the majority of the reduction expected to be made in 2015, as the FTSE 100 group looks to cut £80m costs per year in the future.CEO John Rishton, who recently warned that flat full-year sales would be flat due to a slowdown in non-civil aerospace markets, said: "We are taking determined management action and accelerating our progress on cost."The measures announced today will not be the last, however they will contribute towards Rolls-Royce becoming a stronger and more profitable company. "We will work closely with employees and their representatives to achieve the necessary reductions on a voluntary basis where possible, while making sure we retain the skills needed for the future."The acceleration of the cost-cutting programme will cost Rolls-Royce a further £120m restructuring costs over the next two years, with around half these costs accrued this year.A note from broker Canaccord on Monday pointed to "trouble ahead" for the company after divisional profit warnings in every non-civil aerospace market in 2014 and "market perception of the company's poor financial communication leading to questions related to management control of the underlying business"."We think Rolls-Royce is entering a period of slower growth in non-civil divisions and we question the visibility of customer off-take, particularly within Tognum."