Jaguar Land Rover: 4500 jobs to go in shake-up

Jaguar Land Rover to Cut Thousands of UK Jobs After Sales Slumps in China Europe

A Jaguar logo is seen on a car wheel in central London Britain on Jan. 10 2019

The job cuts, which will begin with a voluntary redundancy program, are expected to mainly affect roles including administration, marketing and management.

Thursday's move is part of a £2.5 billion ($3.2 billion) push announced a year ago to reduce costs and boost cash flow through 2020.

Meanwhile Rolls-Royce Motor Cars chief executive Torsten Muller-Otvos has pledged that the carmaker will remain in Britain post-Brexit.

JLR is particularly exposed to the first two of these factors.

While China's economy is still far from in recession - it's still projected to grow at 6.5% this year - there is likely to be more bad news to come.

In China, demand was adversely impacted by consumer uncertainty following import duty changes and escalating trade tensions with the US.

JLR's figures were also dented by the introduction of European emissions standards known as WLTP, which resulted in a fall in demand for diesel cars.

The issues at JLR have arisen as Ford is also looking to cut back on its workforce numbers in Europe.

"Jaguar Land Rover workers have had to endure a great deal of uncertainty over recent months as they continue to work hard to ensure the carmaker remains a global leader".

The job cuts announced Thursday will affect mostly workers in the United Kingdom, including contractors, senior management, supervisors, engineering, and design workers, according to people familiar with the matter who asked not to be named discussing details that weren't announced.

Jaguar Land Rover in China
Jaguar Land Rover: 4500 jobs to go in shake-up

And JLR is also one of the most heavily exposed auto makers to continuing consumer confusion about the wisdom of buying a diesel vehicle in the aftermath of the VW emissions scandal. Workforce reductions are part of a $3.2 billion cost-cutting plan to boost savings and cash flow through 2020 as the brands continue to invest in electric cars and self-driving technology. "This is in addition to the 1,500 people who left the company during 2018", the company said in a statement.

The firm cut 1,000 temporary contract workers at its plant in Solihull in 2017. It also has a base in Halewood on Merseyside.

It has hired 4,000 workers in China since 2014.

General Motors said in November it would lay off 14,000 factory and white-collar workers in North America and put five plants up for possible closure as it restructures to cut costs and focus more on autonomous and electric technology.

Unions are keen to examine whether JLR's worldwide plants will continue to see additional investment at the expense of the UK.

Brexit has been a particular drag on the UK.

Governor of the Bank of England Mark Carney said the probability of a no-deal Brexit is "uncomfortably high".

JLR, which became Britain's biggest carmaker in 2016, had been on course to build around 1 million vehicles by the turn of the decade, reported on Thursday a 4.6 percent drop in full-year sales to just under 600,000 vehicles.

The company says the job losses will be global, but it's understood most of the redundancies will occur in the United Kingdom, where the automaker employs around 43,000 people.

If, as expected, the United Kingdom bears the brunt, or the entirety, of JLR's global cost-cutting, JLR may well say it tried to warn us.

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