Aston Martin to cut 500 jobs in restructuring
Luxury carmaker is facing falling demand for its sports cars
Aston Martin is to cut 500 jobs as the carmaker overhauls its business in response to falling sales of its signature sports cars.
The pandemic has deepened the crisis at the luxury carmaker which was already trying to reduce a backlog of cars before the UK government lockdown closed its dealerships and showrooms.
Aston Martin said on Thursday that its business required a “fundamental reset” as it aimed for profitability, and that the proposed job cuts would help “right size” its structure. An employee consultation process will be launched in the coming days.
While Aston Martin said it had seen a strong order book for its first SUV, the DBX, it has had to reduce the volume of sports cars it builds in response to flagging demand.
Aston Martin slumped to a £120m loss in the first three months of this year, in part because of coronavirus closing factories and dealerships.
The company said it was also cutting costs at “every level” of the business, including contractor numbers, marketing and travel.
The restructuring is expected to deliver annualised cost savings of about £10m, while reduced manufacturing and capital expenditure costs should save a further £18m per year.
Andy Palmer stepped down as chief executive at the end of last month, as part of an overhaul of the leadership and board by Canadian billionaire chairman Lawrence Stroll.
Mr Palmer will be replaced on August 1 by Tobias Moers, the head of Mercedes-AMG.