Amid reports of projected loses of up to $6 million for the year, the Australian Rugby Union has cut two managerial positions and announced a major reshuffle of its operations.

Chief executive John O'Neill, who returned to the post in June after a three-year stint with Football Federation Australia, revealed the changes, saying he wanted to "flatten" the organisation's structure.

General manager of public affairs and communications Brian West and head of commercial operations Brian Thorburn have both become casualties under the re-structure.

Former Wallaby Pat Howard has been recruited as general manager of the high performance unit, with the incumbent Pat Wilson to head up special projects.

O'Neill's right hand man during his first tenure with the ARU, Matt Carroll, will manage the Australian Rugby Championship as well as taking over Thorburn's roles.

"The changes flatten the organisation structure and enables me to become closer to all the key components of the business and have up to seven direct reports," O'Neill said in a statement.

"It makes sense."

On Wednesday reports emerged that the ARU could be up to $6 million in the red for 2007, O'Neill responding earlier on Thursday by saying a loss was budgeted for in the Rugby World Cup year.

He admitted the amount would be greater than initially expected but declined to confirm the size of the loss until the end of the year.

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