Jaguar Land Rover, the former U.K. auto company now owned by India’s Tata Motors Ltd. (NYSE: TTM), is about to cut thousands of jobs, following the lead of several other car companies, particularly General Motors. The global auto business is in a decline for the first time in four or five years.
The Financial Times reports that the layoffs, previously signaled, will run as high as 5,000, which should save the parent $3 billion. It would appear that sales are not only down, but that Tata has started to prepare for a recession.
The surprise about the cuts is that sport utility vehicles and crossovers have done well at the expensive of cars recently. The entire Land Rover line is made up of SUVs, albeit expensive ones. Jaguar has joined other luxury car companies with the launch of a crossover and an SUV, the well-reviewed and popular F-Pace and E-Pace vehicles, respectively. Jaguar has priced the E-Pace at the low end of the luxury market, with a base of $38,000, joining its competition at that price point.
The car industry built extra capacity for the run of strong car sales, which pushed both global and U.S. sales to all-time highs. Employees and factories are paying an early price for the overbuilding. As the price continues to come due, watch industry layoffs to spread into the tens of thousands.
Employee morale day at Jaguar Land Rover. Thank you for your service, and good luck.