The company said the job cuts would predominantly be in the United Kingdom where most of its corporate and support functions are based.
He has already cut out layers of Rolls's bloated management, having previously said that the company was too slow to respond to.
Rolls-Royce manufactures engines and power systems for aircraft, ships and energy producers.
The company said it will take a one-off financial hit of £500 million ($670 million) as a result of the restructuring.
Recent annual figures showed Rolls-Royce returned to profit a year ago with a pre-tax surplus of £4.9 billion, thanks to a £2.6 billion accounting boost from the recent strengthening of the pound.
"These changes will help us deliver over the mid and longer-term a level of free cash flow well beyond our near-term ambition of around 1 billion pounds by around 2020", Chief Executive Warren East said in a statement on Thursday.
Rolls said the overhaul, which follows its announcement in January that it plans to slash its five operating businesses to three core units, will impact support functions and management, including within engineering.
At the same time, the company has said it would consider selling its commercial marine business, while in April, Rolls sold German division L'Orange for 700 million euros to USA group Woodward.
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