AgustaWestland is to cut up to 375 jobs under a restructuring of its UK operations, the helicopter firm announced today.
The Finmeccanica-owned company said revenues from the Ministry of Defence were declining, while export orders had slipped in the near term.
The job losses will mainly be in management and corporate functions, said the firm, which employs almost 3,600 workers in the UK mainly at its factory in Yeovil, Somerset. Its business headquarters is in Farnborough, Hampshire.
Shadow defence secretary Jim Murphy said AgustaWestland's Yeovil operation offered "a brilliant workforce and world-class helicopter production".
Mr Murphy told BBC News Channel: "The worrying thing for BAE and possibly now for Westland is that the British Government isn't willing to support enough British industry.
"We can't always buy British, but we should be supporting British companies who are world-leaders.
"They have been bidding for work in recent months and been unsuccessful and I think it is partly because the Government would rather get on to a plane to the United States and sign a contract in Washington than support home-grown business here in the UK.
"There needs to be some change there because this, unfortunately, looks like a pattern of events in industrial policy here in the UK."
AgustaWestland has recently launched the AW169 civilian helicopter which it said will increase the amount of civil design and manufacturing in Yeovil.
Managing director Ray Edwards said: "These steps together - the increased civil aircraft work-flow, the launch of the AW169 and the streamlining of the workforce - will place our UK operation on a strong footing and enable us to keep the skills needed for the UK to retain a viable helicopter capability.
"Our military business remains central to our success. This said, extending our capabilities in civil production and competing for export programmes, both areas where the Government has shown considerable support, are the keys to AgustaWestland's future."
Business Secretary Vince Cable said: "The news of job losses at AgustaWestland will be upsetting for the individuals involved and the wider community in Yeovil.
"The Business, Industry and Skills department is working with the company to help secure a long-term future for the site by helping them to move into civil helicopter work where there are strong opportunities for growth. In July I announced £32 million of Government investment in AgustaWestland Yeovil to help introduce the civil AW169 aircraft and we hope that this will allow them to expand in the future.
"The JobCentre Plus Rapid Response Service is on hand to provide a range of support measures and BIS officials are in contact with the company to ensure that everything possible is done to help those affected. The Skills and Jobs Retention Group is also ready to help the small number of skilled engineers affected by today's announcement."