Following a record-breaking 2017, in which the company sold 621,109 cars, Jaguar demand is now down 26% year to date, while Land Rover - the bigger brand within the group - has lost a fifth of demand in the UK.
News reports parent company India's Tata Motors blamed "uncertainty over Brexit and changes to taxes on diesel cars" as a reason to cut production and not renew thousands of staff contracts.
Jaguar Land Rover (JLR) will not renew the contracts of 1000 agency workers at its Solihull facility due to industry challenges caused by falling diesel vehicle sales.
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Last week the company - which has about 40,000 staff - attributed the move to "continuing headwinds impacting the vehicle industry", though insiders hinted Government policy towards diesel was the main driver. Diesel demand fell by 37.2% last month.
Company's scrip opened at Rs 351.50, then fell to an intra-day low of Rs 337.90 and finally settled for the day at Rs 338.95, down 4.96 per cent over its previous close.
A spokesman at Jaguar Land Rover (JLR) refused to comment on the number of jobs that would be lost but the company stated it would be making changes to its output plans.
He said the problems caused by Brexit were also unlikely to be solved in a timely manner: "It's hard to say how long this production uncertainty will continue around Brexit negotiations, because it's still unclear what the trading relationship will be between the United Kingdom and European Union with regards to tariffs". Earlier this year, JLR had already reduced the production at the Halewood plant due to weakening demand and also the hike in tax on diesel cars.