Jaguar Land Rover is preparing to eliminate about 4,500 jobs worldwide as it responds to the decline of demand for diesels, the slowdown in the sales of new vehicles in China and the drag on sales created by Great Britain’s withdrawal from the European Union, known as Brexit.
While Jaguar Land Rover enjoyed a good year in the U.S. with sales rising 7%, the company, which is the United Kingdom’s largest automaker representing roughly 10% the company’s workforce, is implementing a plan to reduce costs by $3.2 billion.
The effort was announced last year as part of a series of moves toboost cash flow through 2020. JLR already eliminated 1,500 jobs in 2018, the company said Thursday in a statement.
“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,” Chief Executive Officer Ralf Speth said in the statement.
(New Land Rover Defender coming to U.S. in 2020. Click Here for the story.)
The measures are aimed at “ensuring that we maximize the opportunities created by growing demand for autonomous, connected, electric and shared technologies,” he added.
The Jaguar restructuring was announced on the same day that Ford Motor Co. said it would cut thousands of jobs in Europe. Both JLR and Ford are vulnerable to the shrinking demand in the United Kingdom where sales dropped in 2018 to levels last seen during the Great Recession. Brexit, which is set for the end of March, could make the economic difficulties in the United Kingdom even worse.
At the same time, global automakers are also coming to grips with a slowdown in in China and the enormous cost required to nurture new technology.
(Click Here for more about JLR’s new plant in Slovakia.)
JLR said the job cuts announced this week will fall heavily on workers in the U.K., including contractors, senior management, supervisors, engineering and design workers. Production workers won’t be affected, according to insiders interviewed by The Guardian.
Jaguar, owned by India’s Tata Motors Ltd., employed more than 43,000 people during the 2018 financial year. The company said it will start a voluntary buyout program and implement a flatter management system as increases its investment in areas such as electrification.
In June, the company said it would move production of the Discovery sport utility vehicle to Slovakia from Birmingham, England, to make room for future electric cars. The company has said that move will cost 1,200 jobs.
(Jaguar Land Rover cutting production to a three-day week. Click Here for the story.)
Jaguar also froze production at an engine factory in the English Midlands, affecting 500 workers, for two weeks in December, citing slower demand for the motors built at the plant.