Jaguar Land Rover, Ford, Debenhams, John Lewis and Economy Energy collapse: your commercial news round-up
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There’s a theme to this week’s commercial news round-up and that’s carmakers announcing that they will be cutting jobs in the UK, and high street department stores reporting a fall in sales as the retail slump continues. Thinking about what this could mean for the business world, as well as how the legal profession might be involved, is exactly what all aspiring commercial lawyers should be doing. Find out more below:
- Jaguar Land Rover will cut up to 5,000 jobs from its 40,000 strong UK workforce, it has been announced today, with management, marketing and administrative workers expected to be most affected. A decrease in Chinese sales alongside a slump in diesel sales and concerns about the UK after it leaves the EU have resulted in the £2.5 billion cost-cutting plan, while the firm has hired 4,000 workers in China since 2014 and plans to move all production to a new plant in Slovakia.
- Carmaker Ford has also just announced plans to restructure its operations in the UK and Europe, with thousands of jobs expected to be axed across the continent. Ford is currently in talks with unions about reducing costs, with a focus on more profitable models and leaving less profitable markets. The firm will work on expanding its electric and hybrid technology.
- Sales at high street department store Debenhams have fallen 5.7% in recent weeks, including a sharp fall during the important festive trading period. And while Debenhams is in talks with its lenders about its £520 million credit line, Marks and Spencer also confirmed a fall in its sales over Christmas, with a 2.2% decrease. Meanwhile John Lewis says that it might not be able to secure the annual bonus for its 83,000 partners this year, which would be the first time since 1953 that its employees have not received the bonus.
- Coventry-based Gas and electricity supplier Economy Energy has gone bust after efforts to seek rescue funds failed last month. The company supplies energy to 235,000 homes and is the ninth small energy firm to go out of business in the last year. Following Economy Energy's collapse, Ofgem said it will choose a new supplier to take on Economy Energy's customer base "as quickly as possible". The supplier last week was banned from taking on new customers due to concerns over its customer service.
- Halfords has issued its second profits warning in a year, as the retailer blamed mild weather and lower consumer confidence for the fall in sales. Halfords’ shares were down by 15% as it expected to make a profit of up to 17% less than expected this year. “We are in an uncertain environment and will provide an update alongside our preliminary results in May,” the company said.