Jaguar Land Rover (JLR) is set to cut the number of contract-agency workers its employs on its factory floors following a drop in sales.

It has not confirmed how many roles are affected but it reported a loss of £501m before tax in the final quarter of its financial year.

JLR said the decision was made “against the backdrop of the Covid-19 pandemic”.

The Coventry-based car-maker has plants across the UK, including Castle Bromwich, Solihull, and Halewood.

JLR, which is owned by India’s Tata Motors, had been in talks with the government to secure a loan of more than £1bn.

But the company said it has “taken the difficult decision to reduce the number of contract-agency employees in its manufacturing plants over the coming months”.

It is understood that potentially up to 1,100 temporary roles are at risk.

Union Unite’s national officer Des Quinn said this was “a painful blow for a loyal workforce”.

“We urge the government to get on with delivering the urgently needed sector support package, as other countries such as France and Germany have done, so that we can stem the tide of redundancies,” he added.

JLR said it was preparing for a gradual recovery as lockdown was slowly lifted around the world.

“Our operational fitness gives me confidence that we can weather this storm,” chief executive Sir Ralf Speth said.