Jaguar Land Rover (JLR) is cutting 1,000 of its UK contractor roles, blaming continued difficult trading conditions in the motor market.
The job cuts are due to a fall in sales caused by uncertainty around Brexit and confusion over diesel policy, a source told Reuters.
The car maker said it “regularly reviews its production schedules to ensure market demand is balanced globally”.
A spokesperson for Jaguar, which employs more than 40,000 people around the world, said: “In light of the continuing headwinds impacting the car industry, we are making some adjustments to our production schedules and the level of agency staff. We are however continuing to recruit large numbers of highly skilled engineers, graduates and apprentices as we are over-proportionally invest in new products and technologies.
“We also remain committed to our UK plants in which we have invested more than £4bn since 2010 to future proof manufacturing technologies to deliver new models.”
Last summer, JLR announced it would add 40,000 staff in the UK, including 1,000 electronic and software engineers, through a year-long hiring process. The Tata-owned manufacturer said it hoped to begin building electric vehicles in Britain, provided conditions such as support from the government and academics were met.
Dom Tribe, automotive sector specialist at management consultancy Vendigital, said JLR’s decision was a sign of ongoing uncertainty within the motor industry caused by a lack of clarity around a Brexit trade deal.
"With JLR’s UK production facilities exporting around 75 per cent of its vehicles and importing many parts from the EU, this action is in part an effort to help mitigate potentially-costly tariffs, which could significantly damage its bottom line,” he added.
“The downturn in demand for diesel-powered vehicles will have also played a key role in this decision. Diesel cars make up around 90 per cent of JLR’s production output in the UK and the company is behind the curve with regards to bringing hybrid and all-electric alternatives to market.”
The latest SMMT figures showed a significant drop in demand for diesel vehicles, with new registrations of diesel cars down more than 37 per cent in March due to tax changes aimed at encouraging drivers to buy lower-emission motors.