The luxury carmaker Aston Martin Lagonda is to cut its workforce by 20% as it looks to save about £40m after reporting widening losses.

The group, which said earlier this month it was consulting on the latest redundancy programme, said it would reduce its workforce by up to a fifth after action at the start of last year that cut 170 jobs.

In a statement, the company, which is majority-owned by the Canadian billionaire Lawrence Stroll, said: “Having undertaken at the start of 2025 a process to make organisational adjustments to ensure the business was appropriately resourced for its future plans, we had to take the difficult decision at the end of 2025 to implement further changes.

“This latest programme will ultimately see the departure of up to 20% of our valued workforce.”

Details of the job cuts came as the carmaker reported widened pre-tax losses of £363.9m for 2025 against losses of £289.1m the previous year as trading came under pressure from US tariff increases and weak demand.

Investors had been braced for the losses after the carmaker last week issued its fifth profit warning since September 2024 and sold its permanent naming rights to its Formula One team.

In an update to the stock market on Wednesday, the carmaker said: “While China remains a market with long-term growth potential, demand there remained extremely subdued in line with other luxury automotive peers, due to a weak macroeconomic environment and changes to the luxury car tariff effective from July 2025.”

Aarin Chiekrie, an equity analyst at Hargreaves Lansdown, said: “The poor performance is being blamed on external factors, such as US tariffs and macroeconomic uncertainty. But looking under the hood reveals some internal issues, making Aston Martin’s road to redemption more difficult.”

Chiekrie said asset sales and the staff cuts were “only part of the puzzle, as these initiatives can only be taken so far”.

He added: “Long-term success will rely on reversing the group’s declining sales volumes and benefiting from the improved efficiencies that a greater output would bring. Cutting the workforce so drastically makes a significant ramp-up in volumes hard to achieve, and the road ahead remains a difficult one to navigate for Aston Martin.”

Aston Martin shares rose 5% on Wednesday morning.