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United Kingdom
Rolls-Royce has executed a dramatic turnaround under CEO Tufan Erginbilgiç, reversing its fortunes from a struggling aviation supplier to a market leader that has seen its share price surge 500% in just two years.
The transformation, which has restored profitability ahead of schedule, has been driven by "streamlining" its middle management, says the boss.
Upon taking the helm, Erginbilgiç described the company as a "burning platform," warning employees that its long-term viability was at risk. Rolls-Royce, a key engine supplier for Airbus and Boeing, as well as defense departments including the UK Ministry of Defence, had been hit hard by the COVID-19 pandemic and unfavorable contractual obligations. By focusing on operational efficiency and restructuring, the company has rebounded strongly.
Management layoffs and cost reductions
Central to the turnaround has been a restructuring initiative that included laying off 2,500 employees, primarily from middle management roles. The cuts were aimed at streamlining decision-making and improving efficiency across the company’s 42,000-strong workforce.
In parallel, Erginbilgiç implemented a structured performance-driven approach, introducing 17 key performance targets, including improvements to the time Rolls-Royce engines remain operational on aircraft before requiring maintenance, a critical profitability factor.
To drive engagement, the company conducted workshops for 500 employees, allowing teams to contribute innovative solutions directly to leadership. Erginbilgiç emphasized that alignment across all levels of the organization was crucial, stating that without a clear strategy cascading down, transformation efforts would falter.
Industry-wide shift towards leaner leadership
Rolls-Royce’s restructuring aligns with broader trends in corporate leadership, where companies are prioritizing leaner management structures and direct employee engagement. Similar approaches have been adopted by European firms such as Bayer, which eliminated over 5,000 managerial positions, and pharmaceutical giant Sanofi, which leveraged small group initiatives to integrate AI solutions company-wide.
The shift reflects a growing belief that bloated management can hinder innovation and responsiveness. By simplifying structures and setting clear strategic goals, organizations are positioning themselves for long-term growth.
