Rolls-Royce is planning to cut 2,600 positions over the next 18 months, mainly within its aerospace division.
The restructuring is intended to save £80 million ($128 million) per year, although it will result in £120 million of incremental costs over the next two years.
Rolls-Royce had warned last month that it was expecting a weaker revenue performance across the group.
Although its aerospace division was among its stronger businesses, the manufacturer says its engineering requirement has lessened as a result of its ending primary development of the Trent 1000 and Trent XWB engines, both of which have entered production.
Simplification of its operations into two sectors – Aerospace and Land & Sea – will enable the company to “reduce management layers”, it adds, while efficiency has been improved through investment in new facilities and technology.
Rolls-Royce chief John Rishton says that the company will aim to achieve the cuts through voluntary measures “where possible”. But he also warns that the new measures will “not be the last”.
“We will continue to pursue further cost improvements in all areas, including in our Land & Sea division,” he says.
About half of the annual savings from the restructuring will feature in the company’s financial guidance for 2015.