A report in the Financial Times says that Tata-owned Jaguar Land Rover (JLR) is planning a GBP2.5bn cost-cutting plan that could result in the loss of up to 5,000 jobs.
The company has been hit by slower orders as demand has slumped in China and the market in Europe has moved away from diesels, which still dominate its Land Rover SUV line-up.
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Earlier this year, JLR said it would address the need to improve profitability and cashflow with cost-cuts. Jaguar Land Rover launched two initiatives, called 'Charge' and 'Accelerate', to identify short-term cost and cashflow improvements as well as longer-term operating efficiencies. Total profit, cost, and cashflow improvements of GBP2.5bn over the next 18 months are targeted under the plans. As part of this, JLR says it has taken action to reduce planned spending by about GBP500m to GBP4bn per year this financial year and next.
However, the announced plans did not specify how many jobs could go. The FT report – citing unnamed sources 'close to the company' – said that more details of cost cuts and headcount reductions are expected to be outlined in January.
The report also said that JLR parent Tata Motors has commissioned Boston Consulting Group to draw up turnround plans after the company has swung to loss. Some analysts predict that the company will also be forced to trim its large product portfolio as it also wrestles with the higher costs associated with the shift towards powertrain electrification.
See also: Jaguar Land Rover swings to quarterly loss
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