Jaguar Land Rover to cut more than 1,000 jobs after loss

Jaguar Land Rover plans to cut more than 1,000 jobs after reporting a £501m fourth-quarter loss as sales plunged because of the Covid-19 crisis.

The UK carmaker intends to reduce the number of contract workers it employs by as many as 1,100 in the next few months. The reductions will affect its UK sites at Solihull and Castle Bromwich in the West Midlands and Halewood in Liverpool and are on top of 5,000 already cut in a programme that started last year.

JLR reported a pretax loss of £422m for the year to the end of March on revenue of £23bn. In the fourth quarter the company suffered a £501m loss on revenue and reported revenue of £5.4bn as closures of car showrooms caused the number or retail vehicles sold to fall 31% to 109,869.

Before the outbreak of Covid-19 the company, owned by India's Tata Motors, had returned to profit in the second and third quarters and expected to report an annual profit. JLR said after shutting down its showrooms and plants the company was seeing signs of recovery in China and was gradually restarting production at UK factories, its Slovakia facility and a contract assembly line in Australia.

Worldwide sales fell 62.5% in April to 14,709 and 43.3% in May. The company has increased its target for cost cuts in the current year by £1bn to £5bn and has cut its investment target to £2.5bn from £3.3bn 2019-20.

"Against the backdrop of the Covid-19 pandemic, the company has taken the difficult decision to reduce the number of contract-agency employees in its manufacturing plants over the coming months," the company said.

The cuts at JLR, which employs 32,000 people in the UK, add to job losses in the UK car industry including at Bentley, McLaren and Aston Martin Lagonda. Big British companies have announced tens of thousands of job losses in the past two weeks as Covid-19 and the resulting recession hit demand.