The chief executive of Rolls-Royce has shaken up its senior management team and scrapped two divisions as part of his attempt to turnaround the struggling engineer.

Warren East, who took charge of the company in July, will scrap the aerospace and land & sea divisions that split Rolls into two parts, leading to the departure of two senior executives.

The move means that Rolls will operate with five smaller businesses all reporting directly to East. The Rolls chief executive plans to bring in a chief operating officer to assist him in running the company.

In total, roughly a dozen senior jobs will be affected by East’s changes.

Rolls said the revamp will “simplify the organisation, drive operational excellence and reduce cost”.

The Rolls boss is overhauling the company after it issued five profit warnings in less than two years. East wants to cut costs by between £150m and £200m a year.

The level of concern about the future of Rolls was underlined earlier this week when it emerged the government has drawn up contingency plans to nationalise its nuclear submarine business or force it to merge with defence manufacturer BAE Systems in the event the company’s performance worsens.

Shares in Rolls rose 2.3% on Wednesday after the company’s announcement.

East said: “The changes we are announcing today are the first important steps in driving operational excellence and returning Rolls-Royce to its long-term trend of profitable growth.

“This is a company with world-class engineering capability, strong market positions and exceptional long-term prospects.”

Under the new structure Rolls will operate with five divisions from January 1 2016 - civil aerospace, defence aerospace, marine, nuclear, and power systems. Tony Wood, the president of the aerospace division, will leave the company after 15 years, as will Lawrie Haynes, the president of land & sea.

In other changes, Colin Smith will move from his role as group director of engineering & technology to become group president, a role that will involve advising East and the senior management team.

Rolls will give more details and an update on its cost-cutting plans and the impact on jobs in February when it posts annual results.