Rolls-Royce was struggling to survive, then CEO laid off 2,500 managers—now stock price has surged 500%

Just two years ago, Rolls-Royce was on the brink of collapse. CEO Tufan Erginbilgiç, who took charge in 2022, called it a “burning platform,” warning employees that the company faced its last chance at survival, Fortune reported. Today, Rolls-Royce has defied the odds—its stock price has soared 500%, and it hit profit targets two years ahead of schedule. The company’s transformation, which has added over $70 billion to its market value, was driven by an aggressive overhaul led by Erginbilgiç.

Turbulence before takeoff

Rolls-Royce, known for manufacturing aircraft engines for Airbus and Boeing, as well as propulsion systems for defense aircraft and submarines, faced severe challenges when Erginbilgiç stepped in. The COVID-19 pandemic had crushed air travel, and the company was weighed down by unprofitable contracts. While a global recovery in air travel helped, the real change came from within.

The four pillars of change

Erginbilgiç implemented a bold four-part strategy to rescue the company:


Exposing the crisis: His blunt assessment of Rolls-Royce’s struggles forced employees to recognize the urgency of change.

Restructuring the workforce: In 2023, the company cut 2,500 managerial jobs, eliminating layers of bureaucracy and streamlining decision-making. Simultaneously, workshops for 500 employees fostered innovative thinking.

Setting clear goals: Rolls-Royce established 17 performance targets, including improving engine uptime to reduce repair-related losses.

Executing with urgency: The transformation was driven with “pace and intensity” to ensure rapid impact.

“If you don’t have a strategy that can cascade down to 42,000 people it won’t get delivered,” Erginbilgiç told the Financial Times.

Lessons from corporate turnarounds

Other struggling companies have embraced similar radical strategies. Sanofi CEO Paul Hudson used a small test group to introduce AI tools before expanding adoption through word-of-mouth. Meanwhile, Bayer CEO Bill Anderson slashed 5,000 management roles and shifted to self-directed 90-day work cycles, later reporting lower attrition.

Rolls-Royce’s turnaround underscores how decisive leadership and bold decisions can drive corporate recoveries. Once on the edge of failure, the company has redefined its future, proving that strategic transformation can yield remarkable results.