Aston Martin to cut up to 20% of workforce amid tariff pressure

Aston Martin will cut up to 20% of its workforce as the British luxury carmaker grapples with US import tariffs, weak demand in China and mounting financial strain.

The company said on Wednesday that the reductions, affecting a workforce of around 3,000 employees, are expected to generate annualised savings of about £40 million. The announcement was first reported by Reuters.

The planned cuts include a previously announced 5% reduction unveiled last year, forming part of a broader cost-control programme. Aston Martin did not provide a precise timeline for the latest job losses but said most of the savings would be realised this year.

Alongside the workforce reduction, the company trimmed its five-year capital expenditure plan to £1.7 billion from £2 billion, delaying investment in electric vehicle technology.

Shares in Aston Martin rose nearly 5% in early trading following the announcement, recovering after nine consecutive sessions of declines.

Tariffs and weak demand

Aston Martin said US tariffs had been “extremely disruptive” to its business. At the same time, demand in China — the world’s largest car market — has been “extremely subdued”.

The company has struggled to generate consistent cash flow and manage its debt burden, which stood at £1.38 billion. Despite capital injections from Canadian billionaire and chairman Lawrence Stroll, as well as other financing arrangements, the balance sheet remains under pressure.

In 2025, Aston Martin reported an operating loss of £259.2 million, underscoring the scale of the challenge facing the maker of the James Bond sports car.

Cash strain and recovery plan

The company warned it expects further cash outflows in 2026 but projected a “material improvement” in financial performance. It is targeting gross margins in the high 30% range and adjusted earnings before interest and tax close to breakeven.

A key contributor to that improvement is expected to be around 500 deliveries of the new Valhalla hybrid supercar, which forms part of the group’s refreshed product strategy.

As part of its efforts to bolster liquidity, Aston Martin last week agreed a £50 million deal to sell the perpetual branding rights to its Formula One team.

The latest measures underline the pressure on premium carmakers navigating geopolitical tensions, slowing global demand and the costly transition to electrification.

Whether the restructuring will be enough to stabilise the balance sheet remains to be seen, but for now Aston Martin is prioritising cost discipline over expansion as it attempts to steer back towards profitability.