The company said it was essential to cut the workforce of 4,050 at the yard, which is at present in competition with the Royal Dockyard in Devonport, Plymouth, for the lucrative contract to refit Trident nuclear submarines. The Government announced this month that it had ruled out a dual option for Trident.
Although Babcock Thorn, which took over the yard in 1987, stressed yesterday that the redundancies had nothing to do with the awaited decision, its action will be seen as a part of a wider financial exercise aimed at impressing the ministry by reducing costs.
David Batty, Babcock Thorn's director and general manager of MoD projects, said that financial pressures on the ministry meant that future expenditure was less than had been expected.
Rosyth at present refits nuclear submarines and a range of surface vessels from Type 42 destroyers to minor warships and offshore patrol vessels.
Mr Batty said refit contracts had been cancelled and the ministry was 'looking to us to do existing work for less'.
The job losses - 200 staff and 350 industrial posts - were based on the company's estimated needs over the next few years, Mr Batty said. He said this assumed that Rosyth would win the Trident battle with Devonport.
'The reality is that we have pressures on us now,' he added. 'The measures announced today will help us in the long term.'
Job reductions will initially be voluntary, but compulsory redundancies have not been ruled out.
Whichever yard fails to win the Trident contract is expected to be given MoD assurances that it will have the bulk of work on surface ships. Rosyth's senior management have already stated that this is a second prize they would rather not have.Reuse content