In Brief

Jaguar Land Rover confirms 4,500 jobs axed

Brexit fears, a slump sales in China and dwindling diesel orders lead to layoffs

Jaguar Land Rover has confirmed that 4,500 jobs from its 40,000-strong UK workforce have been cut as part of a strategy to save £2.5bn. 

The BBC said this morning that the job cuts primarily affect those working in the British carmaker’s management, marketing and administrative divisions, though “some production staff may also be affected”.

The layoffs come in the wake of what experts are calling a “perfect storm”, the broadcaster notes. This refers to a “downturn” in Chinese sales and diesel car orders, as well as uncertainty over the company’s “competitiveness” once Britain leaves the EU.

China is JLR’s biggest market, though “tensions” with the US have made Chinese consumers “more cautious”, says Sky News.

Diesel cars account for around 80% of JLR’s sales, but fallout from the Volkswagen emissions scandal and “consumer confusion” have seen consumers move away from vehicles using the fuel, the broadcaster adds. 

JLR has also warned on numerous occasions that a no-deal Brexit could have catastrophic effects on the motoring industry in Britain.  

The company posted losses of £90m for the third quarter of 2018 and announced a £2.5bn turnaround programme in October, which the firm is expected to outline later this month, Autocar reports. 

The job cuts were revealed by the Financial Times in December, after company insiders revealed that the layoffs would run “into the thousands”.

Speaking to the FT, Robin Zhu, an analyst at Bernstein in Hong Kong, said JLR is in a “do or die” situation.

“JLR has been seriously mismanaged in recent years, with cost runaways, products disappointing in the market and hedging issues costing it billions,” he said. “Meanwhile, there’s arguably been a lack of accountability in the management ranks.”

The British carmaker has production facilities in Castle Bromwich, Halewood, Solihull and Wolverhampton.

Last April, the company confirmed it would not renew the contracts of 1,000 agency workers stationed at its Solihull plant, blaming Brexit and the Government’s stance towards diesel cars.

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