Bentley went official with the announcement and confirmed it will cut 1,000 jobs to compensate for lost revenue and production during the shutdown of its UK plant. The company said staff will be initially reduced through voluntary layoffs but did not rule out compulsory departures.
“Losing colleagues is not something we are treating lightly but this is a necessary step that we have to take to safeguard the jobs of the vast majority who will remain,” Bentley CEO Adrian Hallmark said in a statement. He did not offer a figure for the cost of the voluntary layoff package but said it was “expensive.” Bentley also said it would likely delay its planned EV to 2026, instead of 2025 as originally planned. [Updated 6/5/2020]
Aston Martin is not the only British luxury car manufacturer to announce massive layoffs as Bentley is expected to cut its UK workforce by about a quarter.
The Volkswagen Group-owned company will reportedly axe 1,000 jobs in its home country, most likely via voluntary redundancies. The move comes as the automotive industry faces a massive drop in sales due to the crisis brought about by the novel coronavirus outbreak.
Adding insult to injury is the fact that Bentley has struggled to be profitable in recent years. According to the BBC, Bentley is expected to make a formal announcement regarding the layoffs on Friday, June 5. For now, the company has declined to comment on the report.
In May, Bentley CEO Adrian Hallmark said that a quarter of the company’s employees had been furloughed due to the lockdown, with another quarter working from home. Since the announcement, the carmaker has restarted production at its Crewe plant on May 11, but with only around half the usual number of staff.
Bentley currently has 4,200 full-time workers: about 2,200 are working at the Crewe factory, 1,500 are working from home and 500 are still furloughed with their salaries being paid by the British government.
The luxury car manufacturer has struggled to be profitable in recent years, though it managed to increase global sales by 5 percent to 11,000 vehicles in 2019. The company completed a turnaround plan last year but now appears to have been dealt a major blow by the sharp fall in demand for new cars caused by the coronavirus.
With car manufacturers, suppliers and dealerships closed for weeks, consumers have been holding off on expensive purchases. According to UK’s SMMT trade body, only 20,000 new cars were registered in the UK in May, down 89 percent year-on-year. It was the worst May result since 1952.