While a slim-down was expected at the Plymouth complex, yesterday's cutbacks were greater than predicted. Orders for naval refits have been lower than anticipated.
Union leaders warned that this was 'not the end of the matter'. Another 500 jobs could go over the next six to 12 months, according to Bill Goffin, Plymouth district secretary of the Amalgamated Engineering and Electrical Union.
The redundancies will cut the workforce to 4,400 and come only three months after Devonport won a drawn-out battle with Rosyth for the pounds 5bn order to refit the Trident nuclear submarine.
Mr Goffin said that the Trident success had not secured one additional permanent job. He said the redundancies sought could not be achieved voluntarily and all unions at the dockyard were united in opposition to sackings. 'We look as if we are heading towards a dispute situation,' he said.
Mike Leece, managing director and chief executive, said the company hoped to achieve the redundancies voluntarily. 'This is a hard decision, but it is necessary in order to ensure the overall viability of the business. It reflects our determination to out-perform all competitors in our chosen markets,' he said.
Mr Leece said the cuts would affect all levels and all departments of the company, which only a few months ago was the scene of champagne celebrations over the Trident order. The Government only confirmed the contract last week but the Plymouth management had warned of future job losses.
'We have repeatedly emphasised our overall objective of improving cost effectiveness,' said Devonport Management Limited in a statement yesterday.
''These are vital if we are to win future unallocated warship refits and offer the Ministry of Defence greater value for money.
'We are continuing to achieve significant savings from both productivity increases and overhead labour reductions, which are therefore being reflected in our business projections.'
Eric Martlew, Labour's defence spokesman, said the Plymouth workers had been abandoned by the Government. 'This could have been avoided if Malcolm Rifkind had been prepared to work with the EC and help Devonport diversify.'
Tony Bell, lead negotiator for the specialists' union IPMS, said: 'Trident has turned out to be far from the saviour of the South-west economy.'