Up to 371 jobs are being axed at defence giant BAE Systems as the group said it was slowing production of its Typhoon jet fighters.
BAE said the vast majority of the job losses would affect its 13,000-strong workforce in Samlesbury, Lancashire, although some roles will also be impacted in its Typhoon final assembly production team.
The group also warned that the move to slow jet production would hit its 2015 financial results and will see Typhoon production sales drop from around £1.3 billion in 2015 to around £1.1 billion in 2016.
BAE said it hopes to look at opportunities elsewhere in the business to mitigate compulsory redundancies.
The blow comes as BAE is having to stretch out its Typhoon production line.
BAE secured a deal to supply 28 Typhoon aircraft for the Kuwait Air Force in September, with deliveries from the Italian Typhoon final assembly line set to start around the end of the decade.
The group is also in talks with Saudi Arabia to try to secure further Typhoon purchases, but discussions are making slow progress.
BAE chief executive Ian King said: "Overall the company is operating in an improving business environment and we continue to win new orders, with good prospects for the future.
"In the short term, action to extend the production life of Typhoon aircraft by reducing the current production rate and a charge to impair the carrying value of the Williamstown shipyard in Australia will impact the group's 2015 results."
BAE slashed its earnings outlook for the full year, saying it now expected earnings per share to be around 38p - the same as last year - having previously said they would be "marginally higher".
While incoming orders have disappointed, the group said it expected talks to see additional Typhoon contract wins "in the months ahead" and forecasts good sales growth in 2015.
It added that "defence and security remain the first priority of governments in all of our markets".
"In the UK, budget commitments to defence spending provide greater certainty and stability ahead of the forthcoming 2015 Strategic Defence and Security Review," it said.
The firm also confirmed it had decided not to sell off its US-based information technology business, having put it under review in April after receiving external interest.
BAE, which employs more than 80,000 people worldwide, reported a £1.5 billion drop in sales to £16.6 billion for 2014 in February and said underlying earnings fell by 11% to £1.7 billion.
But it said at the time that it hoped earnings would improve in 2015 amid ''greater stability and improving clarity'' in its key markets.
In May, it announced it would retain both of its shipyards in Glasgow and make its most significant investment in them for decades.
In its long-awaited decision on the future of the shipyards, it said it would invest £100 million in improving and expanding manufacturing facilities at the Govan and Scotstoun yards.
BAE said it would also be cutting jobs in its Australian operations, with the future of its Williamstown shipyard in Melbourne also in doubt.
The group said that, with "no near-term prospect of work" beyond current ship orders, it will be making job losses and slashing its operating divisions from three to two to reduce management costs.
Shares in BAE rose 3% despite the gloomy outlook as investors believe the latest measures could herald a turning point for the group.
Unite union national officer Ian Waddell said: "This is disappointing news on top of a miserable few weeks for manufacturing in the UK. The Government needs to stop dithering and act urgently to stop the haemorrhage of skilled UK manufacturing jobs.
"The Typhoon is a superb aircraft, but it faces tough competition in the export market. It is vital that critical skills and capability are maintained by BAE Systems and their supply chain so that the ability to build the Typhoon in the UK is protected. Cutting too far, too fast could led to a skills shortage for when orders pick up.
"We will be working closely with the company to understand and manage the proposed job losses and seeking guarantees of no compulsory redundancies. In the meantime the Government must redouble its efforts to help the company win vital export orders."
Unite warned BAE against cutting "too far, too fast" and urged the firm to offer a guarantee of no compulsory redundancies.
As well as the Samlesbury site, jobs in Warton, Preston, will be affected.
Shadow defence secretary Maria Eagle said: "This news is a blow for British defence manufacturing, its workers and their families. The Government urgently needs to get a grip and stand up for high-skilled British defence jobs."
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