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Jaguar Land Rover And Ford Hit With Huge Job Losses

Industry News / 5 Comments

Falling China sales and declining demand for sedans are being blamed.

Last year, a report emerged that Jaguar Land Rover is preparing to cut thousands of jobs across its UK workforce. Now, the automaker has confirmed 4,500 jobs are being slashed as part of its $3.15 billion cost-cutting plan that aims to improve cash flow and costs to save £2.5 billion ($3.1 billion) over 18 months. The job cuts are expected to predominately affect management, marketing, and administrative roles, but production staff could also be affected. Despite the job losses, the company hasn't announced any plant closures. This is in addition to the company's 1,500 job losses last year.

The announcement from Britain's biggest car manufacturer comes as a result of declining sedan and diesel sales, as well as a sharp fall in China sales. Consequently, the automaker posted a huge loss of £90 million ($113 million) in the Q3 2018. Other factors include the uncertainty around Brexit, US trade tariffs, the public's negative perception of diesel after the dieselgate scandal, and new WLTP regulations.

Falling sales in China are one of the main factors since this is the company's biggest and most profitable market. As new emissions regulations have led to an increase in electric car sales, sales in China have fallen nearly 50 percent in recent months.

Jaguar Land Rover is already preparing for this shift and is investing heavily in the development of electric and hybrid vehicles. Every new Jaguar Land Rover model launched from 2020 will have an electrified variant. As sedan sales continue to fall, Jaguar Land Rover could do with launching the new Defender off-roader sooner, rather than later.

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Ford Europe has also announced it will be axing thousands of jobs across its European operations that employs 53,000 people after the company posted a loss of 245 million euros (around $282 million) in Q3 2018. The UK isn't expected to be initially affected, but that could change if the UK leaves Europe without a negotiated deal.

Ford Europe says it will increase its focus on electric and hybrid technology and develop more profitable vehicles such as crossovers, with the aim of achieving a 6 percent operating margin in Europe. It will also expand its commercial vehicle business, which will be one of three new divisions being created, along with passenger vehicles and imported vehicles.