Troubled jet engine maker Rolls-Royce (LON:RR.) is planning a major shake-up to revive its fortunes that may include thousands of job cuts.
The company on Tuesday unveiled a review of its business designed to combat falling demand in areas such as marine power and maintenance of older jet engines.
Rolls said earlier this month that this year's profits would be towards the lower end of guidance and that it would face sharply weaker demand in 2016.
New chief executive Warren East, who replaced John Rishton earlier this year, said a major restructuring would streamline senior management.
He aims to save £150mln-£200mln per year with benefits starting in 2017, targeting a 1-2 year payback.
There have been reports that the savings could include 2,000 job cuts at Rolls plants in the UK and around the world.
East has already announced plans to merge maintenance businesses in the Far East and Europe, but he pointed to rising demand for engines for wide-bodied aircraft such as the Airbus (EPA:AIR) A350 as a source of strong long-term cash-flows.
East also vowed to keep the market better informed about conditions in its business and markets.
The company has faced criticism in the past for shocking the City with unexpected profit warnings. The latest, on November 12, was its fifth in less than two years.
East said Rolls was facing change in demand for its products as it doubled its large engine output and managed reductions in other markets such as marine power.
Marine power has taken a hit as the oil & gas industry reduces investment in equipment such as rig support vessels.
East said: "These changes, while more painful than we expected in the near-term, are vital to our long-term success."
Shares in Rolls rose 0.5p to 569.5p in the first hour of London trading.