Luxury car manufacturer Aston Martin Lagonda announced it will reduce its workforce by 20% in a bid to save approximately £40 million. This decision follows a report of significantly widened pre-tax losses, which reached £363.9 million for the fiscal year 2025, compared to £289.1 million in losses the previous year. The company’s financial struggles are attributed to various factors, including increased tariffs in the United States and a decline in demand for luxury vehicles.
The announcement of layoffs comes shortly after Aston Martin revealed earlier this month that it was consulting on a redundancy program. This workforce reduction follows a previous move made at the start of 2025, which resulted in the elimination of 170 jobs. In a formal statement, the company, primarily owned by Canadian billionaire Lawrence Stroll, acknowledged the tough decision, stating, “Having undertaken at the start of 2025 a process to make organisational adjustments to ensure the business was appropriately resourced for its future plans, we had to take the difficult decision at the end of 2025 to implement further changes.”
Aston Martin’s recent woes have been compounded by a challenging economic climate. In an update to the stock market, the company explained that while China holds long-term growth potential, current demand remains “extremely subdued,” mirroring trends seen across other luxury automotive brands. This downturn is further exacerbated by changes to the luxury car tariff effective from July 2025.
Equity analyst Aarin Chiekrie from Hargreaves Lansdown commented on the company’s performance, attributing the losses to external pressures such as US tariffs and broader macroeconomic uncertainties. He also pointed out that internal issues complicate Aston Martin’s recovery efforts. Chiekrie noted, “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.” He expressed concern that drastic workforce cuts could hinder the company’s ability to ramp up production in the future.
Despite the negative financial news, Aston Martin’s shares saw a slight increase, rising 5% on the morning following the announcement. Investors had anticipated the poor performance after the company issued its fifth profit warning since September 2024 and sold its permanent naming rights to its Formula One team.
As Aston Martin navigates these turbulent waters, its focus will need to shift towards stabilizing sales and enhancing operational efficiency. The coming months will be critical for the luxury carmaker as it seeks to re-establish its position in an increasingly competitive market.
