Falling sales in China and Brexit is also being blamed.
Jaguar reported a huge loss of £90 million ($113 million) in the third quarter of 2018, citing falling demand for sedans and diesels, costs associated with Brexit, and a sharp sales decline in China. According to a report by The Financial Times, this has prompted the automaker to slash thousands of jobs next year as part of a $3.15 billion cost savings plan that includes $1.26 billion of cuts.
Jaguar Land Rover hasn’t announced how many jobs will be cut, but sources close to the company have told The Financial Times that the job losses will run “into the thousands”. A financial analyst that covers Jaguar Land Rover told the publication that up to 5,000 jobs are expected to be cut. Jaguar Land Rover currently employs around 40,000 people in the UK, and has already cut 1000 jobs at its Solihull plant.
“It’s do or die at the moment,” Robin Zhu, analyst from Bernstein in Hong Kong said. “JLR has been seriously mismanaged in recent years, with cost runaways, products disappointing in the market, and hedging issues costing it billions. Meanwhile, there’s arguably been a lack of accountability in the management ranks.”
Jaguar Land Rover’s $3.15 billion cost savings plan is being referred to as “Project Charge” and “Project Accelerate.” The former is a three-year plan focusing on cost savings within the first 18 months, while the latter is expected to reduce Jaguar Land Rover’s model ranges.
“Jaguar Land Rover notes media speculation about the potential impact of its ongoing Charge and Accelerate transformation programmes,” the automaker said in a statement. “As announced when we published our second quarter results, these programmes aim to deliver £2.5 billion of cost, cash and profit improvements over the next two years. Jaguar Land Rover does not comment on rumours concerning any part of these plans."