Jaguar Land Rover (JLR) has announced plans to reduce its workforce by 4,000 jobs as part of a significant restructuring effort. This decision follows a decline in sales across major markets and the impact of a cyber-attack that disrupted production last year. The company has invested billions to transition towards electric vehicles, facing competition from expanding Chinese brands.
JLR's sales in China have decreased from 146,000 vehicles in 2017 to 62,400 in the last financial year, attributed to increased competition from domestic manufacturers and a slowdown in the Chinese economy. The introduction of a new luxury car tax has also affected profit margins.
The Volkswagen Group has similarly experienced revenue declines in China, leading to plans to cut 100,000 jobs by the end of the decade. Chinese brands like BYD and Chery are gaining market share in Europe, complicating the landscape for traditional carmakers.
In the US, JLR sold over 120,000 cars in the year ending March 2025, but this figure dropped to just under 100,000 the following year, partly due to the cyber-attack that cost the company £1.9 billion. The introduction of import tariffs has further impacted sales and profits.
To address these challenges, JLR is planning a partnership with Stellantis to produce new Defender models tailored for the US market, which would avoid tariffs. Additionally, rising energy costs in the UK are affecting production expenses, with experts noting that high electricity prices impose a competitiveness tax on British industry.
JLR is also focusing on developing a new generation of electric vehicles, with a £15 billion investment. The first electric Range Rover was recently unveiled, while the relaunch of Jaguar as an all-electric brand has faced controversy due to its advertising campaign. JLR's chief executive, PJ Balaji, has indicated that cost-cutting measures are necessary, which may lead to compulsory redundancies. Suppliers are also under pressure due to high energy and employment costs, leading to increased anxiety in the supply chain.