Jaguar Land Rover to cut 4,000 jobs over the next two years
The carmaker is reducing its workforce due to challenges from competition, tariffs, and the shift to electric vehicles.
By BBC News
Jaguar Land Rover (JLR) has announced plans to reduce its workforce by 4,000 jobs over the next two years, primarily affecting its UK head office. The company is facing significant challenges, including competition from Chinese manufacturers, tariffs imposed by the US, and the transition to electric vehicles.
The decision follows a cyber-attack last year that forced JLR to halt production for over a month, exacerbating its long-term issues. Currently, JLR employs approximately 43,000 people worldwide.
Chief Executive PB Balaji expressed the company's commitment to supporting affected employees with care and respect during the redundancy process. He acknowledged the automotive industry's significant challenges, including rapid technological changes and ongoing geopolitical uncertainties.
JLR aims to implement these job cuts through voluntary redundancy, with a window for applications open until 4 October. However, the company has indicated that it may resort to compulsory redundancies if necessary, with affected employees set to receive notifications in the coming days.
The redundancies are part of a strategy to save £1.7 billion over the next two years. David Bailey, a business and economics professor at Birmingham University, highlighted JLR's importance to the UK economy, noting that many jobs depend on its supply chain. He remarked that the firm is central to the UK's automotive industry.
Despite its initial view of China as a growth market, JLR has been losing sales to Chinese competitors. Additionally, US tariffs have negatively impacted the company, which does not have a manufacturing facility in the US, unlike many of its rivals.
In its financial results for the year ending March, JLR reported a 20% decline in sales, dropping from £29 billion to £22.9 billion, attributing this slump to US tariffs and the cyber-attack.
Ian Robertson, a former director at BMW, suggested that JLR should have established manufacturing operations in the US earlier to mitigate these challenges. He also noted that the company has been slow to produce its first electric vehicle, which is set to enter production soon. Robertson added that Brexit has further complicated JLR's situation, although its factory in Slovakia provides some operational flexibility.
A spokesperson for the Prime Minister acknowledged the uncertainty and concern this announcement brings for affected workers and their families. Business Secretary Jonathan Reynolds is in close contact with JLR and is scheduled to meet with the company soon, although he ruled out any form of government bailout.
Liam Byrne, chair of the Business and Trade Committee, described the job cuts as a significant blow to workers and communities in the West Midlands, calling for urgent support for those affected.
Some industry observers have attributed JLR's struggles to the zero emission vehicle (ZEV) mandate, which requires all new car and van sales in the UK to be zero-emission by 2035. Critics argue that this mandate, along with rising energy costs, is harming the British automotive sector. Shadow Transport Secretary Richard Holden has pledged to abolish the ZEV mandate, while Sharon Graham, general secretary of the Unite union, described the situation as a result of years of underinvestment in the industry.
In contrast, the UK Sustainable Investment and Finance Association has defended the ZEV mandate, stating it is essential for attracting investment in the electric vehicle market by providing a clear growth pathway.