Tata Motors owned Jaguar Land Rover (JLR) is planning to introduce a voluntary redundancy programme aimed at trimming its workforce by around 4,000. In a statement sent to Just Auto, JLR confirmed the job reduction target amid efforts to save around GBP1.7bn over the next two years. An impact of the cost savings would be to reduce the break-even level of annual volume to around 300,000 units (historically, the company’s brands have sold over 400,000 units a year).
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
While JLR has long been a star performer for Tata Motors with its high margin products selling well across major world markets, sales and profits have slumped over the past year or so. As well as being hit by a cyberattack last year, the company faces major headwinds across the world in the shape of import tariffs in the US and a brutal price war in China – where local OEMs are producing aggressively priced competitors, especially in the form of electrified SUVs.
GlobalData analyst Justin Cox put the JLR announcement in context. He said: “The big challenges facing JLR are also being faced by other automotive companies, and they are concluding that they have to take action – for example in the restructuring announced last week at Volkswagen Group. JLR must take steps to improve its competitive position in the medium-term, so this plan to reduce headcount is not unexpected.”
In a statement sent to Just Auto, PB Balaji, JLR CEO, said:
“The automotive industry faces significant challenges, with technological change amidst intense competition and ongoing geo-political uncertainty. Through our Growth Reimagined strategy, JLR is moving decisively to strengthen our competitiveness and position the business for long-term success.
“Over the next 12 months, we will launch five new products, continue to leverage the strength of our brands and renew our focus on North America, amongst other markets, to help us deliver double digit revenue growth. At the same time, we are reducing organisational complexity and targeting £1.7 billion of savings to lower our break-even point towards 300,000 vehicles and become fitter to compete in a rapidly evolving market.
“These actions will support continued investment of £15-18 billion over the next five years in electrification, digital technologies, advanced manufacturing and enhanced customer experiences.
“As part of this transformation, we will reduce our global workforce by around 4,000 roles over the next two years. We recognise this will be difficult news for colleagues affected, and are committed to supporting everyone with care, fairness and respect.
“Together, these actions will help build a stronger, more competitive JLR for all our stakeholders.”
