Jaguar Land Rover Cuts 4,500 Jobs in Plans to Ditch Diesel for More EVs

Jaguar Land Rover’s profitability took a nose dive at the end of 2018, and now the company has announced it’s cutting 4,500 of its staff and fast-tracking plans to introduce more electrified models as diesel sales drop.

A majority of the 4,500 layoffs will be focused in the UK, and the company plans to offer voluntary resignation incentives to dampen the impact of the cuts, according to BBC News. The news comes after a note earlier this week from JLR owner Tata Motors that said it had no plans to divest or shutter Jaguar Land Rover, after oft-rumored plans for a JLR initial public offering now appear to have fallen through.

The job cuts come as sales of diesel cars and sales in China slow down, reports the BBC, leading to a £90 million (about $115 million) pre-tax loss in a three month period of 2018 that saw a £385 million (about $491 million) profit the year before.

The issues are numerous. After becoming the company’s largest market in 2017, JLR’s efforts to push the cars it manufacturers in China through Chinese dealers has gotten blowback, with dealers claiming the excessive incentives to push sales are unsustainable, as Automotive News reported earlier this week:

“JLR’s dealers in the world’s largest car market, however, don’t like the locally built cars. “They tell us that they lose money selling those vehicles,” [JLR CFO Ken] Gregor said, adding that JLR plans to end the “vicious circle” of pushing ever-higher incentives to support an “unsustainable” level of volume in China. “If that means accepting lower volume to allow our own profitability to be rebuilt then that’s what we will look to support,” he said.”

Jaguar’s strategy of sedans is also collapsing, with XE sales down 22 percent in October 2018 and XF sales down 20 percent. Even the crossovers are taking a hit, though, with the F-Pace, the brand’s best-seller, also slipping 25 percent through October 2018.

Now Jaguar Land Rover claims demand for diesels is washing out as European governments increase pressure to go electric, and is particularly worried about the potential outcome of the UK’s ever-shifting Brexit plan that the automaker claims is damaging consumer confidence, via the BBC.

Now the automaker will further invest in expanding its electric lineup beyond the Jaguar I-Pace, with plans for new drive until and battery assembly to be produced in the U.K.