Aston Martin Lagonda has announced plans to reduce its workforce by up to 20% in a bid to save approximately £40 million following a significant widening of its losses. The luxury car manufacturer, which is primarily owned by Canadian billionaire Lawrence Stroll, stated that this decision comes after previous job cuts that eliminated 170 positions at the start of 2025.
In a statement released by the company, it emphasized the necessity of making “organisational adjustments to ensure the business was appropriately resourced for its future plans.” The statement continued, expressing the difficulty of the decision, noting, “This latest programme will ultimately see the departure of up to 20% of our valued workforce.”
The announcement of the job cuts coincided with the company’s report of pre-tax losses amounting to £363.9 million for 2025, a marked increase from losses of £289.1 million in the previous year. The financial strain has been attributed to pressures from increased tariffs in the United States and a decline in demand for luxury vehicles.
Investors had anticipated these losses, particularly after Aston Martin issued its fifth profit warning since September 2024. The company also faced scrutiny after selling the permanent naming rights to its Formula One team, indicating financial challenges.
Market Conditions and Future Prospects
In a recent market update, Aston Martin highlighted ongoing difficulties in the Chinese market, which, despite its long-term growth potential, has seen extremely subdued demand. This decline aligns with trends observed across other luxury automotive manufacturers, attributed to a weak macroeconomic environment and new luxury car tariffs that came into effect in July 2025.
According to Aarin Chiekrie, an equity analyst at Hargreaves Lansdown, the company’s underperformance stems from both external pressures, such as US tariffs, and internal challenges. Chiekrie noted that while asset sales and workforce reductions are steps taken to address immediate financial concerns, they represent only a part of the broader strategy needed for recovery.
He remarked, “Long-term success will rely on reversing the group’s declining sales volumes and benefiting from the improved efficiencies that a greater output would bring.” The drastic workforce reduction poses significant challenges for future production increases, leaving Aston Martin’s path to recovery complicated.
Despite the grim news, shares of Aston Martin rose by 5% on Wednesday morning, indicating some investor optimism or speculative trading in light of the recent announcements. The company faces a pivotal moment as it attempts to navigate these challenges and restore profitability while managing a reduced workforce.
