Jaguar Land Rover plans to cut 5,000 of its 40,000 workforce in the UK, theFinancial Times reported.
JLR has been hit hard due to trade tensions between China and the U.S., both key markets for the automaker, low demand for diesel cars in Europe and costs associated with Britain’s departure from the EU.
Tata Motors said in October that it plans to cut costs and improve cash flows at JLR by 2.5 billion pounds ($3.2 billion) over 18 months in a turnaround plan. Tata did not say how many jobs would be lost. JLR will first focus on cash saving “quick wins” such as reducing nonproduct investments and speeding asset sales, Tata said in an investor presentation.
JLR is also bracing for the possibility of the UK exiting the European Union next year without a deal, threatening to disrupt auto-industry supply chains.
Investment advisers Evercore ISI said JLR needs to do more than cut costs, reduce capital expenditure and turn around its China business. “The company needs to consider whether it’s spreading itself too wide and whether competing with the Germans in the tough premium sedan segment is a viable strategy,” it said.
JLR’s problems include higher research and development spending relative to sales than other automakers and limited economies of scale, Evercore said in a note to investors on Monday.