Aston Martin announced Thursday plans to cut up to 500 jobs as part of a major restructuring to deal with losses that started mounting well before the Covid-19 coronavirus pandemic hit.

Aston Martin will also reduce its capital expenditure by 10 million British pounds (approximately $12.5 million) and manufacturing costs by 8M British pounds for the year as part of the restructuring. The resulting savings are expected to be about 10M British pounds, which is in addition to 10m British pounds worth of savings announced in January.

The company reported a loss of almost 119 million British pounds for the first three months of 2020, and that was after a loss of 104.3M British pounds for the whole of 2019. It blamed falling sales of its sports cars as the cause of the losses and the resulting job cuts.

“The measures announced today will rightsize the organizational structure and bring the cost base into line with reduced sports car production levels, consistent with restoring profitability,” Aston Martin said in a statement.

The good news is that the long-awaited DBX remains on track to start deliveries in the summer. Aston Martin has over 2,000 orders for the SUV, which is expected to become the company's most popular model.

Aston Martin is also committed to entering Formula One next year with a rebranding of the current Racing Point team. It will be the first time an Aston Martin races in F1 since the 1950s.

Tobias Moers

Tobias Moers

The announcement of the job cuts comes just a week after Aston Martin named Mercedes-AMG chief Tobias Moers as CEO. Moers is due to start his new job on August 1, replacing Andy Palmer who stepped down in May.

Aston Martin's ownership structure also underwent a major shakeup in March when new investors, led by Canadian billionaire Lawrence Stroll, threw the company a financial lifeline. Stroll, who also leads the Racing Point F1 team and is father to current driver Lance Stroll, was named chairman of Aston Martin, and together with his investors own 25% of the company.

Aston Martin's share price is down 78% over the past year, closing Wednesday at 68.9 British pence, which values the company at 1.05 billion British pounds.