• JLR, posted a $630 million loss in its March quarter, while sales plunged 30%
  • JLR said it only had 22,000 pre-orders for its Land Rover Defender vehicle
  • JLR had earlier cut about 500 jobs in January

British auto manufacturer Jaguar Land Rover, or JLR, said on Monday that it will cut more than 1,000 contractor jobs in the U.K. due to the covid-19 pandemic.

JLR, the biggest automaker in the U.K., posted a $630 million loss in its March quarter while sales plunged by more than 30%.

The company employs about 32,000 in the U.K.

The Unite union noted that about 400 jobs will be cut at JLR’s plant in Solihull with the remainder spread out over the company’s other locales in the West Midlands and Merseyside.

“Through its ongoing transformation program, Jaguar Land Rover is taking action to optimize performance and achieve further operational efficiencies to enable sustainable growth and safeguard the long-term success of our business,” the company said. "Against the backdrop of the COVID-19 pandemic, the company has taken the difficult decision to reduce the number of contract-agency employees in its manufacturing plants over the coming months."

JLR CEO Sir Ralf Speth stated: "Our immediate priority has been the health and well-being of our people -- and this remains the case as we have now begun the gradual, safe restart of our operations.”

JLR said on Monday it only had 22,000 pre-orders for its Land Rover Defender vehicle, the off-roader the company hoped would drive sales growth.

Although JLR has started to reopen factories in the U.K. and Europe, most are running at low capacity, while the plant at Castle Bromwich remains closed.

“The company plans to resume production gradually to meet recovering demand,” the company said.

JLR had cut about 500 jobs in January, prior to the pandemic, in conjunction with its plan to focus on electric vehicles.

Several other British carmakers, including Bentley, Aston Martin and McLaren have all cut jobs earlier this month.

The Unite union called JLR’s job cuts a “devastating blow.”

“This is a painful blow for a loyal workforce,” said Unite national officer Des Quinn. “Given the unprecedented drop in demand due to the Covid-19 pandemic it was all but inevitable that job losses would be announced. It is another devastating blow for our auto sector and the communities that rely on them for jobs. 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.”

Quinn added: “Unite will ensure that the affected workers are fully represented and assisted during this difficult and stressful period. If workers are made redundant then Unite will ensure they receive everything they are legally entitled to.”

JLR had about £3.7 billion ($4.7 billion) of cash at the end of March, along with a £1.9 billion ($2.4 billion) credit facility,

But the company spent £1.5 billion ($1.9 billion) during April and May and expects to record cash outflow of about £2 billion ($2.5 billion) in the quarter ending June.

Earlier this year, JLR also signed an agreement with Chinese banks for a £560 million ($706 million) new loan facility. (The Bank of England refused to provide emergency funding due to JLR’s junk-level credit rating.)

JLR’s parent corporation, Tata Motors Ltd. of India posted a March quarter loss of 98.94 billion rupees ($1.3 billion), while quarterly revenue fell nearly 28% from a year ago.