JLR could axe thousands of jobs in turnaround plan
17 December 2018
17 December 2018
Jaguar Land Rover is planning to axe up to 5,000 jobs as part of its turnaround plan as parent company Tata looks to return the business to profit.
According to a report in the Financial Times, the job cuts will be announced in the new year as part of the company’s £2.5 billion (€2.8 billion) plan. The carmaker employs 40,000 in the UK and has been stung by declining diesel sales and the costs of preparing for Brexit.
Tata’s turnaround plan comes after Jaguar Land Rover (JLR) lost £90 million (€100 million) during Q3 2018. It included £1 billion (€1.1 billion) of cost savings in the next 18 months. During January, the company will outline the short-term part of its plan, including job losses, according to the newspaper.
JLR has already cut 1,000 jobs this year and reduced working hours at sites across the UK amid falling sales and Brexit uncertainty.
There are two strands to the plan, the short-term ′Project Charge’ and the medium-term ′Project Accelerate’. Charge is a three-year plan that will focus on generating costs savings within 18 months. JLR said that it had in September announced plans ′to improve its business performance through the ongoing Charge and Accelerate transformation programmes, targeting £2.5 billion of cost, cash and profit improvements over the next two years.
JLR has had a turbulent year, recording its first six month’s worth of losses in a decade, and aims to reduce costs by £1 billion, investment by the same amount, with a further £500 million (€556 million) in other savings. It has, according to the paper, already implemented an immediate hiring and non-essential travel freeze, as well as reviewing its use of agency staff.
In September, Tata Motors issued a warning over Brexit. The parent company wanted to ensure that its UK business, which it purchased in 2008 from Ford, remains financially strong in the face of challenges the country faces as it negotiates its departure from the European Union.
JLR has also seen demand for its vehicles in Europe drop amid uncertainty over diesel vehicles, together with additional taxes on the fuel in its home market.
′We want to make it financially stronger,’ Tata Sons Chairman Natarajan Chandrasekaran said, without elaborating. ′We believe in that company.’
JLR posted a sales increase during November, with sales of its new Jaguar SUV models boosting the brand by 38.6%. However, Land Rover sales decreased by 9.3%.