Jaguar Land Rover is planning to cut as many as 4,000 jobs over the next two years as the British carmaker slashes costs in response to pressure from cheaper Chinese rivals. The company, which is owned by India’s Tata Motors, said it had “informed our colleagues, and trade union partners that JLR is opening a voluntary redundancy programme offering salaried and management team members the opportunity to leave the business”. “We must further simplify our organisation, improve efficiency and build greater resilience,” it added. JLR did not disclose the size of the job cuts.

However, a person with knowledge of the matter said as many as 4,000 employees would be affected, adding that jobs at its production facilities will not be affected. The redundancy plans were first reported by The Sunday Times. The carmaker’s chief executive PB Balaji unveiled a plan in June to carry out cost cuts of £1.7bn and pivot towards the US market in a bid to break even with annual sales of about 300,000 units instead of 380,000 at present.

JLR’s planned redundancies pose a fresh challenge for new Prime Minister Andy Burnham as other UK-based manufacturers including Aston Martin and Bentley also shrink their workforces in response to weak sales. Business secretary Jonathan Reynolds told the BBC on Sunday that he had spoken to Balaji and the general secretary of Unite the Union, and they were expected to hold a joint meeting “early next week”. “If this is about making sure over time that workforce is right to make the business as competitive as possible, that’s the conversation we need to have,” Reynolds added. He said the automotive industry had been a “priority” for the Labour government because it was facing such a “challenging” period.

JLR has grappled with falling sales amid the rapid influx of Chinese rivals into the UK car market and the fallout from a massive cyber attack last year. Chery, which owns the Jaecoo and Omoda brands, has sold more than 91,000 vehicles so far this year in the UK with the huge success of Jaecoo 7, which has been dubbed “Temu Range Rover”. Land Rover sold close to 41,000 units, according to figures from the Society of Motor Manufacturers and Traders.

JLR has undergone a sweeping product overhaul that has introduced models at higher prices and will soon launch a new all-electric Jaguar that will cost well over £100,000. Range Rover also unveiled its first fully electric model this month, which will be built in Solihull, with a starting price of £154,070. In response to US tariffs, JLR is considering producing vehicles locally through its new partnership with Stellantis.

Unite general secretary Sharon Graham said there were “intensive government discussions” over the weekend to mitigate the impact of JLR’s job cuts. “Once again, we will leave no stone unturned to support these workers. It cannot be acceptable that workers again are made to pay the price,” she added.