BMW to cut 400 jobs at Oxford Mini plant as COVID-19 dents demand

German carmaker BMW (BMW.DE) is set to cut around 400 jobs at its Mini plant in Oxford as the coronavirus pandemic continues to hurt demand for new cars.

The cuts will affect around 400 of the 950 personnel supplied by the Gi Group agency, a BMW UK spokesperson said in an email to Yahoo Finance UK.

“The COVID-19 pandemic has resulted in a substantial impact on customer demand and, like other automotive manufacturers, our volume forecasts for 2020 have had to change accordingly,” the spokesperson said.

BMW UK said it has approximately 4,000 staff — a mixture of BMW & agency production workers — onsite at Oxford, and last year it produced over 222,000 Minis.

“Our decision has been made after close discussion with trade union representatives and we are aware that our plans will have an impact on people during an uncertain and worrying time,” Bob Shankly, Human Resources Director at the Oxford Mini plant, said in an emailed statement.

“We have sought to protect as many jobs as we can, while also taking the necessary steps to ensure the stability of our business in light of this current period of volatile and unpredictable market conditions,” Shankly wrote.

READ MORE: New cars sales in UK rise as dealerships reopen

“We have clear criteria agreed with Gi Group about who will be retained – length of service, individual skillset and disciplinary record being the main ones,” the BMW spokesperson said. “Individuals will be informed in mid-September.”

BMW told AFP news agency in mid-June that it will cut around 6,000 of its over 120,000 jobs worldwide this year, as part of a broad savings programme aimed at battling the ongoing economic fallout of the coronavirus pandemic.

READ MORE: Coronavirus sales slump drives BMW to a second quarter loss

Carmakers in the UK suffered their worst sales slump since the year after World War II in April and May — just 197 cars were produced in April and 5,314 in May. Sales began to tick up again in July, but demand is down 41% for the year to date, the forecast is for a full-year drop in demand of around 30%, totalling £20bn in lost sales, according to Society of Motor Manufacturers and Traders.

The news comes as Rolls-Royce (RR.L) today announced plans to close one of its UK factories in Nottinghamshire, as a drastic cost-cutting drive continues at the struggling plane-engine maker.

READ MORE: Coronavirus: Rolls-Royce closes factory as jobs cull continues

Rolls-Royce confirmed that a site in Annesley, Nottinghamshire, will shut for good. Around 120 workers will be offered the chance to transfer to its bigger site in Derby, around 20 miles away.

The company announced plans to slash 9,000 jobs worldwide in May and all of its civil aerospace sites were put under review, as part of a drive to save £1.3bn a year.