Head coach Andy Robinson has kept his job following a review of England's poor Six Nations performance, but three of his assistants have been axed.
Robinson (right) will no longer have Lydon (left) alongside him
Defensive coach Phil Larder and kicking guru Dave Alred have been sacked, while attack coach Joe Lydon has been offered a job with the National Academy.
An Elite Rugby Director, overseeing all aspects of representative rugby in England, will also be appointed.
The RFU admitted Sir Clive Woodward could be a contender for the role.
While Robinson will remain in his role, he will have "revised responsibilities".
The Elite Rugby Director will help to form a strategy for England at the start of every season, assist Robinson with team selection and take on some of his administrative responsibilities.
RFU chief executive Francis Baron said: "Andy is an excellent coach who has the support of the players.
"With the changes we have made he is in a very good position to build on his strengths."
New forwards, attack and defensive coaches will be appointed and advertisements for them will be placed in the next few days.
Baron said someone already within the RFU had been approached to take one of the roles, but otherwise no-one had yet been sounded out.
These three coaches will be the only ones that assist Robinson on a full-time basis.
Specialists such as scrummaging coach Phil Keith-Roach and fitness coach Dave Reddin will work in the Elite Rugby Department and assist Robinson on a part-time basis.
Former Ireland full-back Conor O'Shea, currently Director of Regional Academies, will be promoted to the position of National Academy Director from 1 June.
Performance Director Chris Spice tendered his resignation and it has been accepted by Baron.
Baron (left) revealed the changes at Twickenham on Thursday
His duties will now be taken on by the Elite Rugby Department.
In all, 10 people within the RFU have lost their posts. Baron said he had spoken to each of them on Thursday to let them know the news.
"It has not been an easy process, especially when you are dealing with people's livelihoods, but it has been a necessary one," he said.
"We are confident that the resulting measures are the best way forward."
Since winning the World Cup, England have lost 13 of their 25 Tests, and won only six of 19 against the major nations.
"There is no doubt that the performances since the World Cup have been unacceptable and that changes have to be made if we are to turn things round," Baron added.
"We believe that these changes will give England, with Andy at the helm, the best chance of defending the World Cup in 18 months' time."
Robinson supported the outcome of what he called a "very thorough and extensive" review.
"I support the new structure and I think it is the best way forward for England," he said.
"I was as disappointed as anyone with our Six Nations performance and I am confident that these changes will help us move on.
"I would like to thank Phil and Dave for their massive impact on English rugby and I am sorry to see them go.
"They played a huge under-stated part in helping England win the World Cup and no-one should under-estimate the contribution they made.
"I have enjoyed working with Joe and his influence has been tremendous. I hope he will still be involved in the Academy and we can continue to draw on his numerous skills."
These are some of the other changes brought about by the review:
Nathan Martin, currently Head of Performance Services, has been promoted to Elite Rugby General Manager, responsible for management, administration and budget control within the department.
The National Academy will be expanded to include the Regional Academies and specialist coaches and will service all national teams below senior level.
National Academy coaches Tosh Askew and Damian McGrath will be released along with David Shaw, Head of Regional Academy Operations.