By Rajwa Quasim
India’s Tata Motors-owned luxury carmaker Jaguar Land Rover announced that it would cut around 4,000 jobs globally over the next two years as part of a plan to reduce costs amid intense competition in the automotive market.
Through the job cuts, the company expects to save £1.7 billion ($2.30 billion). The cuts will mainly affect employees at Jaguar Land Rover’s UK-based headquarters. Unlike several other major carmakers, Jaguar Land Rover does not have a manufacturing facility in the U.S. The company employs around 43,000 people globally, including more than 30,000 workers in the UK.
Apart from intense competition in the market, the company has been disadvantaged by U.S. tariffs, which affect vehicles imported into the country. Jaguar Land Rover does not have a manufacturing facility in the U.S. Another challenge was a cyberattack the company faced last year that forced it to halt production for more than a month.
The company now hopes to achieve most of the reductions through voluntary redundancies, with employees given until Oct. 4 to apply. However, it warned that compulsory redundancies could follow if not enough workers volunteer.
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Chief Executive PB Balaji said the company understood the impact of the redundancies on employees and promised to handle the process with “care, fairness and respect.”
“The automotive industry faces significant challenges, with technological change amidst intense competition and ongoing geo-political uncertainty,” he said.
Competition from Chinese carmakers has increased rapidly as they expand their presence in international markets while strengthening their electric vehicle offerings.
The company said it plans to launch five new products over the next year. The restructuring is also expected to support £15 billion to £18 billion in investment over the next five years, with a focus on electrification, digital technology, advanced manufacturing and enhanced customer experiences.
UK Secretary of State for Business, Innovation and Trade Jonathan Reynolds said Sunday that he would meet with Chief Executive PB Balaji this week to discuss the planned job cuts following media reports about the plans.
Former BMW director Ian Robertson told the BBC that JLR should have followed competitors by establishing manufacturing operations in the U.S. market. He pointed to carmakers such as BMW, which has a factory in Spartanburg, South Carolina, and Mercedes-Benz, which has a manufacturing facility in Tuscaloosa, Alabama.
Robertson also said JLR was relatively late in developing EVs, with the company only recently beginning production. He added that Brexit, Britain’s exit from the European Union, had created additional challenges for the company.
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The announced job cuts have reignited debate over the UK’s Zero Emission Vehicle (ZEV) mandate. Critics argue that the rules do not apply to vehicles sold abroad, where the company earns most of its revenue.
The ZEV mandate was introduced under the previous Conservative government and continued by the Labour Party. It requires all new car and van sales in the UK to be zero-emission vehicles by 2035.
Critics of the ZEV mandate, including Shadow Transport Secretary Richard Holden, have blamed the policy and rising energy costs for damaging the British auto sector. The UK Sustainable Investment and Finance Association, however, has defended the policy, arguing that it provides the predictable framework needed to attract investment in EV infrastructure.
JLR’s job cuts announcement adds to growing concerns about the global auto industry. German carmaker Volkswagen also plans to cut another 50,000 jobs by 2030, bringing the total number of potential job cuts to 100,000 by the end of the decade.