Jaguar Land Rover has revealed it is to cut up to 1,100 temporary agency jobs after the coronavirus pandemic badly hit its sales.
Workers on temporary service contracts at Wolverhampton, Solihull and Castle Bromwich could lose their jobs by the end of the year with the first wave of cuts to take place by the end of July.
It has not said how many would go at each site.
It came as it was revealed Jaguar Land Rover sales were down by more than 100,000 cars in the final three months of its financial year as the coronavirus pandemic hit it hard.
The luxury car maker has reported a pre-tax loss of £501million in the three months to the end of March.
For the year its loss was £422m on turnover of £23bn.
JLR, which has its engine manufacturing centre employing 2,000 at the i54 to the north of Wolverhampton, had returned to profit in the second and third quarters of the year.
The final quarter saw sales drop by 30.9 per cent and for the year they were down 12.1 per cent.
The improvement in the second and third quarters, reflected double-digit retail sales growth in China, as well as cost and cash flow improvements under its Project Charge transformation programme.
Before the emergence of the Covid-19 pandemic, the company expected these trends to continue in the fourth quarter to achieve a full-year profit and meet its other financial targets for 2019-2020.
The pandemic saw fourth quarter sales down by 109,869 cars on a year before while full year sales totalled 508,659 vehicles.
JLR responded quickly to the Covid-19 situation, implementing a temporary shutdown of all plants and rigorous cost and investment controls to conserve cash.
The company is now seeing encouraging recovery in China and is gradually resuming production at the Solihull and Halewood plants in the UK, as well as its Slovakia plant and the contract assembly line in Austria.
Chief executive Sir Ralf Speth said: "Jaguar Land Rover’s early action to transform its business meant that as a company we were on track to meet our full-year expectations and operational and financial targets before the pandemic hit in the fourth quarter.
"We also reacted quickly to the disruption caused by Covid-19. Our immediate priority has been the health and wellbeing of our people – and this remains the case as we have now begun the gradual, safe restart of our operations."
The company saw strong demand over the year for the new Range Rover Evoque, sales of which rose by 24.7 per cent year-on-year and the all-electric Jaguar I-PACE, with sales up 40 per cent.
Sales of the refreshed Land Rover Discovery Sport are expected to continue to grow following its March launch in China.
New products will support the recovery of the business, including the ramp-up of the unparalleled new-generation Land Rover Defender; plug-in hybrid versions of the Range Rover Evoque and Land Rover Discovery Sport with new 1.5-litre three-cylinder Ingenium petrol engine and the newly-refreshed Jaguar F-TYPE.
The company is planning for a gradual recovery as lockdowns are relaxed and economies respond.
The pick-up in China has been encouraging with all retailers now open, contributing to unit sales of 6,828 vehicles in April – down only 3.1 per cent year-on-year - and 8,068 in May (up 4.2 per cent). Sales of Range Rover and Range Rover Sport have been particularly encouraging.
Other regions saw the full impact of lockdowns in April and May with total worldwide sales of 14,709 vehicles in April (down 62.5 percent year-on-year) and 24,024 in May (down 43.3 per cent). However, sales are expected to recover as retailers reopen.
"In such uncertain times, I remain convinced that Jaguar Land Rover’s focus on its people, its innovative products and its Destination Zero mission will remain the key to navigating out of this global crisis effectively. In China, we are beginning to see recovery in vehicle sales and customers are returning to our showrooms. Our operational fitness gives me confidence that we can weather this storm," added Sir Ralf.
The company will open a new battery assembly centre near Birmingham and will begin the manufacture of next-generation electric drive units at the engine manufacturing centre later this year.