Jaguar Land Rover (JLR) is to cut 4,000 jobs as the carmaker struggles with Chinese competition, US tariffs, and the transition to electric vehicles.
The cuts will happen over the next two years and will mostly affect the head office, which is based in the UK.
JLR’s long-term issues were made worse after a cyber-attack last year caused the firm, which employs 43,000 people globally, to shut down production for more than a month.
Chief executive PB Balaji said the firm was “committed to supporting everyone with care, fairness and respect” through the redundancy process.
“The automotive industry faces significant challenges, with technological change amidst intense competition and ongoing geo-political uncertainty,” he added.
JLR is hoping to achieve the cuts through voluntary redundancy, with a window open until 4 October, but said it would make compulsory redundancies with less generous terms if necessary. Affected staff will receive an email in the coming days.
The redundancies are being made in an attempt to save £1.7bn over the next two years.
JLR is “as strategically important as it gets for the UK economy”, according to David Bailey, business and economics professor at Birmingham University.
He said many UK jobs were dependent on its supply chain and the economy as a whole took a hit when the firm closed down production because of last year’s cyberattack.
“It’s the centre of our automotive industry,” he added.
Yet, the car maker has been losing sales to rivals from China, a country which JLR initially saw as a market for growth rather than a source of competition.
In addition, US President Donald Trump’s tariffs have hurt the company, which unlike many of its rivals does not have a factory in the US.
In its results for the year to the end of March, JLR said US tariffs and the cyberattack were the main reasons why its sales had slumped by a fifth to £22.9bn from £29bn in the previous two years.
Ian Robertson, former director at BMW, told the BBC’s Today programme that JLR should have copied its rivals and started manufacturing in the US.
“The biggest operation for BMW in the world is in Spartanburg, South Carolina. Mercedes have their plant further south in Tuscaloosa. JLR didn’t take that decision early enough in my view,” he said.
He also said JLR had been “somewhat late to the party” in terms of electric vehicles.
Jaguar launched the I-PACE, a fully-electric SUV, in 2018. But the electric Range Rover announced last week will be its first electric vehicle launch since then.
Robertson added that Brexit had hurt the firm, despite its factory in Slovakia giving it “some flexibility”.