Near queen no more, Rolls-Royce seeks cheaper HQ

Rolls-Royce Holdings plans to quit its headquarters in one of London’s swankiest districts for cheaper offices as the company seeks to bring down long-term expenses and cover the more immediate costs of fixing a faulty jet-engine model.

Rolls-Royce needs a “smaller, more cost-effective London head-office location” than the current premises midway between the Houses of Parliament and Buckingham Palace, Chief Executive Officer Warren East said in a memo to staff obtained by Bloomberg. One option would be to move closer to the rail route to Derby, central England, the company’s main manufacturing site.

Chief Operating Officer Simon Kirby, who only took over the role in late 2016, will meanwhile leave, East said, adding that the executive had demonstrated “his professionalism” by developing a leaner business that effectively resulted in his own role being eliminated. Kirby was previously CEO of Britain’s 55 billion-pound ($75 billion) HS2 high-speed rail project.

Staff based at Rolls’ HQ will be briefed on options for a move in coming weeks, according to East. The company has occupied the current 37,000-square-foot space at 65 Buckingham Gate only since 2014, having moved there from an address across the street.

The engine-maker may move across London to the area around St Pancras station, from where East and other top executives typically travel to Derby several times a week. The district has itself become a property hotspot in recent years, with Google building a 10-story campus at nearby King’s Cross.

Discussions will also begin with staff representatives on “emerging proposals” for the company’s human resources, finance, IT, general counsel and strategic-marketing functions, East said.