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Jaguar Land Rover to axe 1,100 jobs as Covid-19 bites

Car sales dropped by almost two thirds in April.

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Sales picked back up in China last month. (JLR/PA)

Sales picked back up in China last month. (JLR/PA)

Sales picked back up in China last month. (JLR/PA)

Jaguar Land Rover has said it would cut temporary jobs on its factory floor as the company tries to deal with the fallout of the coronavirus crisis.

The carmarker said it would need to reduce the number of agency staff it hires.

It did not specify how many jobs are set to be lost, however it is understood that up to 1,100 positions are potentially on the line.

“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,” JLR said in a statement.

Union Unite’s national officer Des Quinn said: “This is a painful blow for a loyal workforce.

“Given the unprecedented drop in demand due to the Covid-19 pandemic it was all but inevitable that job losses would be announced.

“It is another devastating blow for our auto sector and the communities that rely on them for jobs.

“We urge the Government to get on with delivering the urgently needed sector support package, as other countries such as France and Germany have done, so that we can stem the tide of redundancies.

It comes as the business, which is owned by India’s Tata Motors, reported a loss of £501 million before tax in the final quarter of its financial year.

It sold just under 110,000 vehicles across the three months, a drop of nearly a third.

The news brings overall pre-tax loss to £422 million for the full year on revenues of £23 billion.

JLR said it is preparing for a gradual recovery as lockdown is slowly lifted around the world.

In China, which was the first country to be hit by the outbreak, the first green shoots are already visible.

In April sales were only down 3.1% in the country compared to the same month last year, and they rose by 4.2% in May.

Worldwide sales dropped 62.5% in April to 14,709 vehicles, and 23.3% in May.

“In such uncertain times, I remain convinced that Jaguar Land Rover’s focus on its people, its innovative products and its Destination Zero mission will remain the key to navigating out of this global crisis effectively.

“In China, we are beginning to see recovery in vehicle sales and customers are returning to our showrooms.

“Our operational fitness gives me confidence that we can weather this storm,” said chief executive Sir Ralf Speth.

He added: “Jaguar Land Rover’s early action to transform its business meant that as a company we were on track to meet our full-year expectations and operational and financial targets before the pandemic hit in the fourth quarter.

“We also reacted quickly to the disruption caused by Covid-19.

“Our immediate priority has been the health and wellbeing of our people – and this remains the case as we have now begun the gradual, safe restart of our operations.”

PA