Jaguar Land Rover announced on Tuesday it would reduce its global workforce by 4,500 as part of a cost cutting plan of USD 3.2 Billion. That’s in addition to 1,500 people who left the Company last year, as per CNN.
The Company has been under duress in major markets such as China, where car sales dropped for the first time in 20 years. Jaguar Land Rover sales in China fell around 42% in December and 22% overall in 2018, the Company said on Thursday.
According to CNN, the Company has also suffered from the uncertainty surrounding Brexit, and a sharp decline in sales of diesel vehicles following Volkswagen’s emissions scandal. In September, workers at one of its UK plants were put on three-day work weeks.
Brexit could be a key factor for the company. JLR said that leaving the European Union without maintaining a smooth relationship with the bloc would eliminate USD 1.5 Billion of its annual profit. Chief Executive Officer Ralf Speth noted that the “wrong outcome” would jeopardize company plans to spend USD 102 Billion in the United Kingdom over the next five years.
“We are taking decisive action to help deliver long-term growth, in the face of multiple geopolitical and regulatory disruptions as well as technology challenges facing the automotive industry,” CEO Ralf Speth said in a statement.
JLR’s competitors are also experiencing a similar burden. American rival Ford (NYSE: F) said Thursday it plans to remove thousands of jobs in Europe as part of an USD 11 Billion global restructuring program.
Thursday’s announcement included a pledge to invest in a new UK assembly center for batteries that will be used to make electric drive units at an existing engine plant, as stated by CNN. JLR plans to introduce electric versions of all its models by 2020.