Jaguar Land Rover is to cut around 4,000 jobs worldwide over the next two years as Britain’s largest car manufacturer launches a major cost-cutting drive in the face of fierce global competition, rising costs and continuing uncertainty in the automotive industry.
The luxury carmaker, owned by India’s Tata Motors, confirmed on Monday that the reductions form part of plans to save £1.7 billion and make the business more competitive.
The announcement is a significant blow for Britain’s automotive industry, particularly in the West Midlands, where JLR has deep roots and remains one of the region’s most important employers.
Around 30,000 of JLR’s approximately 40,000 employees worldwide are based in Britain. The company’s global headquarters are at Whitley in Coventry, while its major UK operations include Solihull, Wolverhampton, Gaydon and Halewood on Merseyside.
The job losses are expected to fall largely on salaried, white-collar positions rather than workers directly employed in vehicle production. Voluntary redundancies are expected to form part of the programme, including among some employees outside Britain.
JLR chief executive PB Balaji said the company was acting amid “intense competition and ongoing geopolitical uncertainty”, with the restructuring intended to create a stronger and more competitive business.
He acknowledged the impact on employees, saying the announcement would be difficult news for those affected and that the company would support staff with “care, fairness and respect”.
The scale of the cuts will nevertheless raise fresh questions for Andy Burnham’s Government over its promise to reindustrialise Britain and encourage investment in manufacturing.
Business Secretary Jonathan Reynolds is expected to meet Mr Balaji this week to discuss the situation. Mr Reynolds has indicated that the Government will not provide a bailout simply to protect existing jobs, although he has left open the possibility of public support for longer-term industrial investment.
JLR has been wrestling with a difficult combination of pressures.
The company has been hit by weaker financial performance, international trade barriers and increasingly aggressive competition from lower-cost Chinese manufacturers, at the same time as the motor industry is being required to spend enormous sums developing electric vehicles and the technology needed for the transition away from traditional combustion engines.
The company is planning between £15 billion and £18 billion of investment over the next five years, covering areas including electrification, digital technology, advanced manufacturing and improvements to the customer experience.
At the same time, management is seeking £1.7 billion in savings and wants to reduce the number of vehicles the business needs to sell in order to break even to around 300,000 a year.
The company has also faced pressure from American trade policy. North America is a crucial market for JLR, leaving the manufacturer exposed to tariffs imposed by US President Donald Trump on imported vehicles.
JLR has also been dealing with the consequences of the major cyber attack which caused severe disruption to its operations and supply chain.
The restructuring comes as Chinese manufacturers continue to increase the pressure on established European carmakers, often offering electric and hybrid vehicles at prices traditional manufacturers have struggled to match.
For Britain, however, the significance of JLR stretches well beyond the company itself.
The manufacturer supports a substantial network of suppliers, engineering businesses and other companies across the country, particularly in the Midlands. Its operations are closely tied to communities that have depended on the automotive industry for generations.
JLR describes itself as the UK’s largest automotive employer and the country’s biggest investor in automotive research, development and engineering.
That makes the loss of thousands of jobs at one of Britain’s flagship manufacturers particularly uncomfortable for a Government which has put reindustrialisation and economic growth at the centre of its agenda.
The immediate challenge for ministers will be to demonstrate how that ambition translates into an environment in which major manufacturers can remain competitive, invest and employ people in Britain, while facing rapidly changing technology, international tariffs and formidable competition from China.
For the thousands of JLR employees now facing uncertainty, however, those wider political promises will offer little immediate comfort.
