Sports car manufacturer Lotus will cut 550 jobs at its UK headquarters in Norfolk, the BBC understands.

Lotus, which is based at Hethel near Wymondham, had previously denied reports that it was to close its factory there and set up a new plant in the United States.

In June, it said it was “actively exploring options in the global market” but remained “committed to the UK”.

However, confirming the job cuts earlier, the company said the decision followed “a review of Lotus Cars’ business objectives in line with the current market conditions”.

In a statement, it said: “We believe this is necessary in order to secure a sustainable future for the company in today’s rapidly evolving automotive environment, which is seeing uncertainty with rapid changes in global policies including tariffs.

“The brand remains fully committed to the UK, and Norfolk will remain the home of the Lotus’ sports car, motorsports and engineering consulting operations.

“It is actively exploring future growth opportunities to diversify Lotus Cars’ business model, including through third-party manufacturing.”

The company currently has about 1,300 workers at the site.

Daniel Elmer, Conservative leader at South Norfolk Council, said: “We will continue to work with Lotus, but our priority now must be the people who are losing their jobs, and we will be working with the county council to put in place support packages.

“We will also be talking to the government to see how they can help us in ensuring that there is a future for this iconic brand in South Norfolk.”

The company was founded in the early 1950s by engineer Colin Chapman and moved to Hethel in the 1960s.

Ben Goldsborough, Labour MP for South Norfolk, said it was “terrible news” and a “punch in the stomach” for the workers.

“But the worst case scenario has been avoided which is a complete and utter closure of Lotus UK,” he said.

A spokesperson for the Department for Business and Trade, said: “We recognise carmakers such as Lotus have been facing significant long-term challenges, and we know this announcement will be concerning for workers and their families.

“This government inherited some of the highest industrial energy prices in the world, while businesses most impacted by global tariffs have faced increased pressures.”

They pointed out they had taken “decisive action” to reduce energy costs for businesses and secured “landmark trade deals” including with the US to save thousands of jobs.