Rolls-Royce has announced plans to accelerate the transformation of its Marine business citing continuing weakness in the maritime market as the primary reason of the move.
In a statement released December 1, the company said it plans to further simplify the structure of the Marine business which supplies a range of technology and services to customers operating merchant, offshore and naval vessels.
This restructuring will, among other things, result in the loss of around 800 jobs worldwide.
Additionally, Rolls-Royce plans to streamline the senior management team and expects a series of cost reduction initiatives to yield £45-50 million of annualised savings from mid-2017. The company added that the costs of this restructuring are expected to be around £20 million, split between 2016 and 2017.
As part of the programme, Rolls-Royce is considering establishing an R&D centre for the development of new propulsion products, and an expanded Services hub for Northern Europe, both in Ulsteinvik, Norway.
The latest proposals follows a series of cost reduction initiatives carried out over the past three years to improve the affordability and competitiveness of the Marine business. The proposed job reductions are in addition to the reduction of 1,000 employees announced in May and October last year.
Mikael Makinen, Rolls-Royce, head of the marine division, said: “Reducing our workforce is never an easy decision, but we have no option but to take further action beyond the changes we have made to date. This remains a fundamentally strong business, but we need to overcome the immediate challenges and focus our investments on the technologies that will shape our future growth.”
Warren East, CEO of Rolls-Royce added: “I am very supportive of Mikael and his team’s proactive efforts to optimise our Marine business in extremely challenging market conditions and at the same time to target investment on future opportunities. The actions being taken will enhance the competitive strength and resilience of the business in what remains an attractive market for Rolls-Royce.”