Jaguar Land Rover (JLR) has confirmed it is cutting 4,500 jobs, with the substantial majority coming from its 40,000 strong UK workforce.
Most will be in office roles as the company wants to simplify its management structure. The cuts come on top of last year’s 1,500 job losses.
JLR is facing several challenges, including a slump in demand for diesel cars and a sales slowdown in China.
The firm has also complained about uncertainty caused by 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.
“We are taking decisive action to help deliver long-term growth, in the face of multiple geopolitical and regulatory disruptions as well as technology challenges facing the automotive industry,” said JLR’s chief executive, Ralf Speth.
JLR, the UK’s biggest vehicle maker, says it will be making further investment in electrification, with electric drive units to be produced at Wolverhampton and a new battery assembly centre to be established at Hams Hall, Birmingham.
Unite, the country’s largest manufacturing union, said it would be pressing the car maker to safeguard its members’ jobs.
“Britain’s car workers have been caught in the crosshairs of the government’s botched handling of Brexit, mounting economic uncertainty and ministers’ demonisation of diesel, which along with the threat of a no deal Brexit, is damaging consumer confidence,” Unite national officer Des Quinn said.
“Government ministers need to wake up and start doing more to support UK’s car workers.”
JLR plans a voluntary redundancy scheme, to help manage the latest round of job cuts.
Jaguar Land Rover has been saying for more than a year that Brexit uncertainty would eventually take its toll on the perception of the UK as a stable and competitive base for global manufacturing.
In July last year, the company said it needed more certainty around Brexit in order to continue investing in its UK operations and warned that a “no-deal” Brexit would cost the company more than £1.2bn in profit each year.
If, as expected, the UK bears the brunt, or the entirety, of JLR’s global cost-cutting, JLR may well say it tried to warn us.
Another massive flashing red light is a collapse in sales in its biggest market – China.
And JLR is also one of the most heavily exposed car makers to continuing consumer confusion about the wisdom of buying a diesel car in the aftermath of the VW emissions scandal.
Ninety percent of its vehicles are diesel-powered, although it has been investing in new electric and hybrid vehicles.
The layoffs come amid what industry insiders have called a “perfect storm”.
That includes a slowdown in Chinese sales, a slump in diesel sales and concerns about UK competitiveness post-Brexit.
China has been the company’s biggest and most profitable market.
But sales there have fallen nearly 50% in recent months as cautious Chinese consumers have been holding back on big ticket purchases.
The relationship between JLR and its Chinese sales network have also been strained as dealers have demanded better terms and promotional incentives.
The issues at JLR have arisen as Ford is also looking to cut back on its workforce numbers in Europe.
Recently JLR announced it would move all production of the Land Rover Discovery to a new plant in Slovakia with plans to hire up to 3,000 workers.
In China it has hired 4,000 workers since 2014.
Here in the UK, JLR’s Castle Bromwich factory makes the Jaguar XF, XF and F-type models, while the Solihull facility produces the Jaguar F-Pace, Land Rover Discovery and Range Rover models.
The company’s Ryton and Halewood facilities manufacture the Jaguar XE SV Project 8, Range Rover SV Coupé, Land Rover Discovery Sport and Range Rover Evoque models.
As well as its UK manufacturing centres, JLR also has facilities in Brazil, Austria, Slovakia, India and China.
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