Manufacturing giant Johnson Matthey have announced they are to cut 2,500 after being hit by the crisis and plan to halve its dividend to shareholders.
Matthey who specialise in producing catalytic converters for used cars, will make more than a sixth of their workforce redundant over the next three years.
According to the Society of Motor Manufacturers and Traders (SMMT), UK car manufacturing plummeted by 99% in April.
Robert MacLeod, chief executive of the business said they made “good progress” prior to the coronavirus crisis, but now they must be “even more efficient” with the current market conditions.
The manufacturing giant plan to secure £80m in saving from cost reductions by 2023, as the firm reported a 27% fall in operating profits to £388m in the year to March. Matthey have taken a £60m hit due to the pandemic.
MacLeod added, “Covid-19 has brought unprecedented challenges to the world and Johnson Matthey.
“During this pandemic, we have tried to balance the needs of all of our stakeholders, but our first priority remains the health and safety of our people, customers, suppliers and communities where we operate.
“I would like to say a heartfelt thank you to all of our employees for their dedication and efforts over the past few months.”
Nicholas Hyett, equity analyst at Hargreaves Lansdown, said: “In recent years the group has benefited from ever tougher environmental legislation increasing the complexity of catalysts and thus increasing the price of catalysts.
“However, that relies on the car industry continuing to tick over, and consumers slammed the brakes on car sales as coronavirus struck.
“There are early signs of recovery in Asia, but whether that will be sustained remains to be seen.”