Aston Martin to axe 500 jobs with Covid-19 stifling demand for cars

Aston Martin Lagonda Global Holdings plans to cut as many as 500 jobs to cope with lower demand for luxury cars amid the coronavirus pandemic.
 

The British company will begin consulting with employees and unions in coming days about building fewer front-engined sports vehicles, Aston Martin said on Thursday. The automaker is targeting savings of about £18 million ($22.6 million) in operating and manufacturing costs, while also lowering capital expenditure by a further £10 million.
 

The elimination of 500 positions equates to almost 20 per cent of Aston Martin’s workforce. The carmaker is the latest from the industry to announce severe cuts in the wake of the Covid-19 outbreak, with Renault SA, BMW AG and Scania AB all initiating retrenchment processes over the past week. The government-imposed lockdowns across Europe forced the closure of factories and showrooms, leaving would-be car buyers stuck at home.

Aston Martin is reducing the workforce just two months after Canadian billionaire Lawrence Stroll led a 536 million-pound capital infusion that was meant to rescue the debt-laden company.
 

In May, Aston Martin ousted Chief Executive Officer Andy Palmer in favor of Tobias Moers, who leads Daimler AG’s Mercedes-AMG performance division and will join Aston Martin on August 1.      
 

Aston Martin had been focused on the introduction of the pivotal DBX, a $189,000 sport-utility vehicle at the heart of the company’s comeback strategy. The company is banking on the model selling in higher volumes than its iconic sports cars made famous in the early James Bond movies.
 

The automaker reiterated Thursday that the DBX remained on track for deliveries in the summer, and has a “strong order book”.