Embattled engine-maker Rolls-Royce is planning to slash costs by up to £200 million a year in a bid to revive its fortunes.

The firm issued its fifth profit warning in less than two years earlier this month as a result of weak demand, and the new boss is set to outline plans for a 'major restructure' on Tuesday afternoon.

Warren East, who only joined the firm in the summer, said the changes will include job cuts to senior management, a reduction in fixed costs and greater pace and accountability on decision-making.

Mr East said he is hoping the changes will achieve gross cost savings of between £150 million and 200 million per year, with benefits accruing from 2017.

'As a group we are undergoing an unprecedented period of change,' he said.

'My review has underpinned my confidence about the opportunities before us and I am convinced that our long-term outlook is positive.

'It has also highlighted a number of areas where we can simplify the way we work, inject pace into our decision-making and responsiveness, and improve our operational gearing and operational effectiveness.

'This is fundamental to ensuring Rolls-Royce best positions itself to compete for the long-term opportunities before us.'