BENGALURU -- Jaguar Land Rover will shed about 1,100 temporary jobs after the Tata Motors subsidiary raised its cost-cutting target 1 billion pounds ($1.26 billion) to ride out disruptions caused by the coronavirus outbreak.
JLR expects to save 5 billion pounds in costs by March 2021, Tata Motors Chief Financial Officer PB Balaji said on Monday, adding that 3.5 billion pounds of the savings had already been achieved.
JLR will also reduce capital expenditure to 2.5 billion pounds for the current fiscal year, from the more than 3 billion pounds it has spent annually in previous years.
"Conserving cash and prioritizing capital expenditure, and targeting investment spending to the right areas is our focus," Balaji told reporters.
JLR anticipates that 1,100 agency employees engaged in manufacturing across various factories will be affected by the cuts. The automaker held off eliminating permanent posts among its 38,000 workers. JLR is tapping the British government’s furlough scheme as it assesses how fast demand is likely to revive.
JLR, which contributes the bulk of Tata Motors' revenues, reported a pre-tax loss of 501 million pounds for the period after it took a hit of 800 million pounds because of the novel coronavirus, Balaji said.
Tata Motors is reviewing all its businesses and would consider exiting those that do not add strategic value, as part of a broader effort to save 60 billion rupees ($789 million) in the Indian company's domestic business in the fiscal year that end in March 2021.
Tata Motors on Monday posted a consolidated fourth-quarter net loss of 98.94 billion rupees, as coronavirus lockdowns across its markets ravaged sales, including at JLR, the Indian automaker said in a statement.
Total revenue from operations fell 27.7 percent to 624.93 billion rupees in the quarter, which ended March 31.
JLR CEO Ralf Speth said there were signs sales were recovering in China, where JLR increased its volume 4.2 percent in May from a year earlier as all of its retailers there reopened for business.
“In China, we are beginning to see recovery in vehicle sales and customers are returning to our showrooms,” Speth said in a release. The company is gradually resuming production at its main Solihull and Halewood factories in the English Midlands, as well as at UK engine plants and its sites in Slovakia and Austria.
Britain’s largest automaker is also seeing improvements in the U.S. and Europe, though the UK and other countries have yet to recover from lockdowns.
Bloomberg contributed to this report