Jaguar Land Rover (JLR) had earlier announced plans to cut costs by £1 billion, over 18 months, in response to deteriorating conditions, which led to its £90-million quarterly loss in September. Indications were high that JLR is anticipated to cut up to 5,000 jobs as part of a £2.5-billion overhaul program, which many critics of the UK government attributed to uncertainty around Brexit event.

The luxury carmaker employs 44,000 workers in the UK at sites in Halewood on Merseyside and Solihull, Castle Bromwich and Wolverhampton in the West Midlands. According to media sources, JLR has hired Boston Consulting Group (BCG) to advice on the turnaround plan.

Management has targeted £2.5bn of cost, cash and profit improvements through FY20, led by slashing investments by £500mn each to £4bn in FY19 and FY20, £500bn through inventory rationalization and working capital reduction and lastly, £1bn of profit and cost actions.

The reason given by the employer is a downturn in Chinese sales, a slump in diesel sales and concerns about UK competitiveness post-Brexit. China is the company’s most prominent and hitherto most profitable market. But sales in China have fallen nearly 50% in recent months as cautious Chinese consumers have been holding back on big-ticket purchases amid global trade tensions.

The company, owned by Indian conglomerate Tata, cut 1,000 temporary contract workers last year at its plant in Solihull had already warned that a bad Brexit deal could cost the company as much as £1.2 billion in profit each year, putting £80 billion of further investment and jobs at high risk. The announcement is expected to include details of sales for 2018, the business outlook for this year.

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