Aston Martin Plans 20% Job Cuts as Tariffs Hit Auto Industry

As the British luxury carmaker struggles with US import taxes, weak demand in China, and growing financial hardship, Aston Martin plans to lay off up to 20% of its personnel. On February 25, the corporation announced that the layoffs, which will impact nearly 3,000 workers, should result in yearly savings of almost £40 million.

The proposed cuts, which are a component of a larger cost-control initiative, include a 5% reduction that was first announced last year. Aston Martin stated that the majority of the savings would be realised this year, although it did not give a specific date for the most recent job reductions. The corporation delayed investing in electric car technologies by cutting its five-year capital expenditure target from £2 billion to £1.7 billion in addition to the personnel decrease.

Aston Martin Facing the Hardship of Auto Sector’s Volatility

US tariffs, according to Aston Martin, have caused "extreme disruptions" to its company. Meanwhile, demand has been "extremely subdued" in China, the largest automobile market in the world. The business has had trouble managing its £1.38 billion debt load and producing steady cash flow.

The balance sheet is nevertheless under strain in spite of capital infusions from Canadian billionaire and chairman Lawrence Stroll and other finance agreements. Aston Martin, the manufacturer of the James Bond sports car, revealed an operational deficit of £259.2 million in 2025, highlighting the magnitude of the problem. Following the announcement, Aston Martin's stock increased by almost 5% in early trading, reversing nine straight sessions of falls.

Aston Martin Revamping its Business Strategies

While predicting a "material improvement" in financial performance, the business cautioned that it anticipates additional cash outflows in 2026. It aims for adjusted earnings before interest and taxes that are about breakeven and gross margins in the high 30% range. It is anticipated that 500 deliveries of the new Valhalla hybrid supercar will play a significant role in that improvement.

These vehicles are a component of the company's updated product strategy. Last week, Aston Martin reached a £50 million agreement to sell its Formula One team has the perpetual trademark rights as part of its efforts to increase cash. The most recent actions highlight how luxury automakers are under pressure to manage geopolitical tensions, weakening global demand, and the expensive electrification switch. It's unclear if the reorganisation will be sufficient to stabilise the financial sheet. However, for the time being, Aston Martin is putting cost control ahead of growth in an effort to return to profitability.