Jaguar Land Rover cuts 4500 jobs as sales fall

Inside the Jaguar Land Rover factory at the i54 in Wolverhampton

Inside the Jaguar Land Rover factory at the i54 in Wolverhampton

Brexit played an indirect role in the decision, Jaguar Land Rover Chief Executive Officer Ralf Speth said on a conference call, citing the United Kingdom automotive market's 6.8 per cent drop in 2018, the worst since the financial crisis. The company already cut 1,000 jobs past year, but new plans to improve cash flow by £2.5 billion ($3.2 billion) include "substantial" cuts to employment that will run into the thousands, a source told Reuters, affecting managerial, research, sales and design staff, but not line workers.

JLR, owned by the Indian conglomerate Tata, announced 1,000 job losses at its Solihull factory in April 2018, after United Kingdom sales of the Range Rover and Discovery models fell, while 2,000 staff at its Castle Bromwich plant moved to a three-day week previous year.

The reason given by the major employer is a downturn in Chinese sales, a slump in diesel sales and concerns about United Kingdom competitiveness post-Brexit.

The firm, which is owned by Indian conglomerate Tata, made a £90m pre-tax loss in the three months to September 30, a major reversal from the £385m profit of the previous year.

"The economic slowdown in China along with ongoing trade tensions is continuing to influence consumer confidence", said Jaguar Land Rover Chief Commercial Officer Felix Brautigam.

With the fallout from the VW emissions scandal continuing to be felt, United Kingdom sales of diesel cars declined by 29.6 per cent in 2018. Production workers won't be affected, the automaker confirmed. "It would be very very hard for us to cope", warned Toyota Motor Europe's deputy managing director, Tony Walker, at a parliamentary committee hearing past year.

"What is crucial now is that the Government acts to mitigate against serious repercussions for tier two and three suppliers in the Black Country and across the West Midlands".

MP for Meriden Dame Caroline Spelman and MP for Birmingham Erdington Jack Dromey both have Jaguar Land Rover workers in their constituencies.

The company's move follows plans announced past year to reduce white-collar jobs across the company's global business.

The vehicle industry has suffered a triple blow as three of the UK's biggest manufacturers announced job and production cuts.

Armstrong said: "We are taking decisive action to transform the Ford business in Europe".

He said: "We will invest in the vehicles, services, segments and markets that best support a long-term sustainably profitable business, creating value for all our stakeholders and delivering emotive vehicles to our customers".

The US carmaker is to abandon the multivan market - vehicles with more than five seats - stop manufacturing automatic transmissions in Bordeaux from August, review its operations in Russian Federation, and combine the headquarters of Ford UK and Ford Credit to a site in Dunton, Essex.

It's a tough day for the European auto industry.

A Ford spokesman said the auto maker now assumes that any Brexit deal would keep tariff-free trade between Britain and Europe.

Armstrong was quoted by the Financial Times as saying the number of layoffs would be in the "thousands" but declined to repeat that quantity in a conference call with reporters, saying only that there would be a "substantial impact" on the workforce.

It came as Ford warned that more than 7,000 engine and gearbox manufacturing and development jobs were under threat after the American manufacturer said it was shaking up its European operations. The company has said that move will cost 1,200 jobs.

"We expect the immediate impact on Ford's United Kingdom operations to be limited". The company said it would start a voluntary buyout program and implement a flatter management system as it increases investment in areas such as electrification.

Jaguar Land Rover announced it is cutting thousands of jobs.

Meanwhile Jaguar Land Rover says it will cut 4,500 jobs as the carmaker addresses slowing demand in China and growing uncertainty about the U.K.'s departure from the European Union.

Latest News