Jaguar Land Rover to cut 4,000 jobs over next two years
Jaguar Land Rover (JLR) plans to eliminate 4,000 jobs over the next two years as the automaker faces mounting pressure from Chinese competitors, US tariffs and the industry’s shift towards electric vehicles.
The job cuts will largely affect positions at the company’s UK-based headquarters. JLR employs about 43,000 people worldwide.
The company’s existing challenges were compounded by a cyberattack last year that forced it to suspend production for more than a month.
JLR chief executive PB Balaji said the company would support affected employees throughout the redundancy process, pledging to handle the exercise with care, fairness and respect.
He said the global automotive sector was confronting major challenges arising from rapid technological changes, intense competition and continuing geopolitical uncertainty.
JLR is initially seeking to achieve the reductions through voluntary redundancies, with employees given until October 4 to apply. However, the company warned that compulsory redundancies could follow if the targeted reductions are not achieved, with less favourable terms for those affected.
Employees whose positions are at risk are expected to receive communication from the company in the coming days.
The restructuring is expected to help JLR save £1.7 billion over the next two years.
David Bailey, a professor of business and economics at Birmingham University, described JLR as critically important to the UK economy, noting that thousands of jobs depend on the company through its extensive supply chain.
He said the wider UK economy was also affected when JLR halted production following last year’s cyberattack, describing the company as being at the heart of the country’s automotive industry.
However, JLR has also been losing ground to Chinese automakers. China, which the company had previously regarded primarily as a major growth market, has increasingly become a source of serious competition.
The company has also been hit by tariffs imposed by US President Donald Trump. Unlike some of its competitors, JLR does not operate a manufacturing plant in the United States.
In its financial results for the year ending in March, JLR said the cyberattack and US tariffs were key factors behind a sharp decline in revenue. Sales fell by about a fifth to £22.9 billion, compared with £29 billion in the previous two years.
Ian Robertson, a former director at BMW, told the BBC’s Today programme that JLR should have followed competitors such as BMW and Mercedes-Benz by establishing manufacturing operations in the US.
He argued that setting up production in the American market earlier could have helped the company deal with the impact of tariffs.
Robertson also said JLR had been relatively slow in embracing electric vehicles. Jaguar introduced its fully electric I-PACE SUV in 2018, but the electric Range Rover announced recently will mark the company’s first new electric vehicle launch since then.
He further suggested that Brexit had created additional difficulties for the automaker, although JLR’s manufacturing facility in Slovakia provides some flexibility.
The UK government has acknowledged the uncertainty facing affected employees and their families. The Prime Minister’s official spokesman said Business Secretary Jonathan Reynolds was in close contact with JLR and was expected to meet company representatives, but ruled out a government bailout.
Business and Trade Committee chair Liam Byrne described the planned redundancies as a major blow to workers, families and communities across the West Midlands.
He called for urgent assurances that affected employees would receive maximum support in finding new jobs.
Unite general secretary Sharon Graham said the union would seek urgent clarification from JLR regarding the planned cuts and urged both the company and government to explore every available option to protect jobs.
She argued that workers should not be forced to bear the consequences of problems they did not cause.
The challenges facing JLR and the wider British automotive industry have also prompted criticism of the UK’s zero-emission vehicle (ZEV) mandate.
Introduced under the previous Conservative government and retained by the Labour administration, the policy requires all new cars and vans sold in the UK to be zero-emission vehicles by 2035. However, the requirement does not apply to vehicles sold in overseas markets, where JLR generates most of its revenue.
Shadow Transport Secretary Richard Holden blamed the ZEV mandate and rising energy costs for putting additional pressure on Britain’s car industry and pledged to abolish the policy.
The UK Sustainable Investment and Finance Association, however, has defended the mandate, arguing that it provides investors with a clear and predictable path for the expansion of the electric vehicle market and is important for attracting financing into the sector.
Source: BBC
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