Jaguar Land Rover is planning to cut 5,000 jobs in the New Year as part of a cost-saving drive by the India-owned, UK-based firm.
Economic uncertainty surrounding Brexit, weak demand from China and a drop-off if in diesel sales have prompted the move.
Some 40,000 people are employed by JLR, making it the UK's biggest car maker. However, demand for its vehicles has dropped off in recent months, a fact which has already compelled the firm to cut 1,000 temporary contract worker jobs in Solihull, where it manufactures Range Rovers and the Land Rover Discovery SUV. Working hours have also been reduced across its plants.
The company made a £90m loss in the three months to September, prompting the firm, owned by Indian conglomerate Tata, to make significant job cuts.
The company wants to make savings of £2.5bn, including £1bn of cost cuts. It is believed the 5,000 job losses are part of the cost-cutting drive.
Boston Consulting Group has been appointed to create the turnaround plan. The car-maker said: “Jaguar Land Rover notes media speculation about the potential impact of its ongoing charge and accelerate transformation programmes.
“As announced when we published our second-quarter results, these programmes aim to deliver £2.5bn of cost, cash and profit improvements over the next two years. Jaguar Land Rover does not comment on rumours concerning any part of these plans.”
Annual investment has been cut from £4.5bn to £4bn and the company aims to reduce its stock of finished cars, as well as its working capital by £500m. As regards the £1bn of cost cutting, recruitment has been frozen, as has all non-essential travel.
Union Unite criticised how the government has handled Brexit and described its policy on diesels as "botched".
A Unite spokesperson said: “Unite will continue to press the car-maker for assurances over the jobs and skills of our members who have worked tirelessly over the past decade to make the company the global success story it is today.”