Springcare, operator of Beech House in Wollerton, near Market Drayton, has sent emails and letters to employees at the home to tell them the home will soon close for an uncertain period of time.
The company said it "hopes" to relocate employees and the 25 residents currently living there (about half of the home's capacity) to its sister homes in the area.
A letter, signed by Springcare managing director Lee Cox and seen by the Shropshire Star, said: "It is with great regret that I am having to write to you to say that the company is planning to temporarily close Beech House.
"In these situations, we would of course normally have a staff meeting so that we could tell you face to face and give you reassurances but with Covid-19 restrictions this is not appropriate.
"The reason for the temporary closure is that, as you will be aware, occupancy levels have dropped and this is affecting company's financial position. Steps need to be taken now to deal with the downturn in business as a matter of urgency.
"Beech House is a great home, with a caring and skilled team providing excellent care and support to our residents and the building has been refurbished, so it is my intention to reopen it as soon as possible, however with the uncertainties created by Covid-19 I cannot give a timescale for this."
The letter continued to say that staff would be "redeployed" to one of the company's other care homes if possible, but that some jobs are at risk. A 30-day redundancy consultation period has now begun.
The document is dated September 16, and said that a telephone line will be open for questions from 9am-5pm today. One-to-one meetings will be arranged next week.
A spokeswoman for Springcare said: "Springcare has the benefit of having a number of care homes within close proximity to Beech House where, respectful of individual choice, residents can transfer and be assured of the same high standards of care and accommodation that Springcare pride themselves upon. Our valued staff team will also be offered this opportunity.
"The safety and welfare of our residents and staff is of paramount importance. Springcare is sensitive to the potential impact of this decision and are fully committed to support our residents, families and staff during this time of change and will be working closely to minimise any disruption to those affected by this unfortunate decision.”