Rolls Royce Chief Executive Warren East has cautioned staff that the engineering firm is running behind its customer deliveries schedule.
As a result he is urging employees to double their efforts to make sure that the company hits its tough annual profit target.
In East’s letter to the car giant’s staff, he insisted that the company is still in a decent shape with a broad balance of issues and opportunities, however there have been a series of difficulties with deliveries.
This means there is now much work ahead in the next half of 2016 and subsequently a higher risk.
The company is attempting to recover from five profit warnings in the space of two years and at its annual meeting in May warned that earnings for the first half of the year would be close to the break even mark.
However, if Rolls Royce is to match last year’s £1.4 billion profit margin, it will need a strong performance in the second half of 2016 as analysts are currently forecasting an underlying profit of £674 million for the year.
The aim of Mr East’s rallying call to the company’s staff was to make sure they are aware of the need for a change of culture in the company and encourage a higher rate of efficiency.
The firm is facing a third lot of job cuts among its senior management sector of 2,000 staff, with hundreds of job cuts expected to be announced over the course of the next few weeks.
The first of Rolls Royce’s five profit warnings came in February 2014 and since then they have implemented a number of efforts to restructure the business by eliminating bureaucracy and ‘trimming fat’.
Appointed as Chief Executive in July 2015, Mr East concedes that morale within the company has suffered as a result of the great restructuring plans.
