Aston Martin slashes 500 jobs

Aston Martin will cut up to 500 jobs from its 2600-strong workforce in dramatic new cost-saving measure designed to save £38 million ($A69m).

Announced ahead of the arrival of new CEO and ex-Mercedes-AMG boss Tobias Moers on August 1, the job losses are part of a new strategy that will lower production volumes and improve productivity.

Aston Martin says the cost-cutting measures will help it deliver sustainable profitable growth in the near future.

Explaining the job losses, Aston Martin said that it will undertake a "fundamental reset, which includes a planned reduction in front-engined sports car production to rebalance supply to demand".

The 107-year-old British car-maker has now launched a consultation process with employees and trade unions over the cuts.

The headline £38m savings are said to consist of £10m in previous savings, £10m in operational cost savings, an £8m reduction in manufacturing costs and a further £10m reduction in capital expenditure.

In the statement released overnight, the British car-maker added: “Aston Martin continues to take decisive action in other areas to reduce cost and remove non-critical expenditure from the business at every level, including in areas such as contractor numbers, site footprint, marketing and travel.”

The emergency restructuring follows the dropping of sales by almost a third due to the impact of the coronavirus, which led to a pre-tax loss of £118.9m ($A215m) in the first three months of 2020.

Helping turn around the ailing sports car maker's fortunes, this year the car-maker will launch its first SUV, the DBX, which is claimed to already have a strong order book before first deliveries begin in a few months' time.

The sports car production reduction suggests Aston has made too many Vantage, DB11 and DBS Superleggera models and will now wait for customer demand to catch up to supply.

It's been reported that the Aston Martin restructuring will cost around £12m ($A22m), but reap £38m in cost savings.