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Is investment in electric cars to blame for JLR slashing jobs?

JLR is going to cut about 10 per cent (500 posts) of its workforce at its Halewood plant near Liverpool, as it moves from a round-the-clock three shift pattern to two, under an agreement that allows it to extend some workdays to accommodate extra demand.

According to Bloomberg, the reason for the reductions is “to cut costs amid mounting spending on electric cars”. On the other hand, Tata Motors (JLR parent company) explains that “it is about efficiency, not loss of volume”, and that the change was agreed as part of pay negotiations last year and that it will seek voluntary departures.

Almost a year ago we reported that JLR had planned to cut 4500 jobs worldwide as it struggled with a sales slowdown caused by reducing demand for diesel vehicles, a downturn in China and uncertainty around Brexit.

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Having already moved production of the Land Rover Discovery to Slovakia from Solihull in Birmingham to make room for future electric cars at a cost of 1200 jobs, Tata has since said it’s open to finding partners for JLR to share the burden of investing in electric vehicles. When leading electric vehicle consumer website asked JLR’s PR department if it had anything to offer in the way of JLR’s electrification strategy, they were told “no” and to “please stand by”.

With the Government recently announcing Britain will ban sales of new gas and diesel cars from 2035 (including hybrid vehicles) – it will certainly heap pressure on JLR and the auto industry as a whole – especially given car production sank to its lowest in almost a decade in 2019, with output forecast to continue falling this year. It will be interesting to see how quickly JLR can move – after all environmental pressures are only going to increase.

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