Tata Steel is to cut an estimated 400 jobs at its plant in the UK as part of the company's restructuring process and to increase competitiveness amid sluggish demand.
Chief executive Karl Koehler said the changes at the Port Talbot plant in Wales were vital if Tata Steel, the world's 12th largest steelmaker, was to remain competitive.
The proposed changes are aimed at enabling the UK Strip Products business to compete in Europe's lower market demand era by reducing costs.
"These proposed changes are vital if we are to build a competitive future for our Strip Products business in the UK. We will, of course, engage fully with employees, trade unions and our political stakeholders during this restructuring process. And we will do everything we can to support our employees through this unsettling time," Koehler said.
He added, "We have invested more than 250 million pounds over the last two years in state-of-the-art steelmaking technology in the Strip Products business. In addition, we are currently investing in our Hot Strip Mill in Port Talbot and we have upgraded our galvanising line in Llanwern enabling us to increase production of high-value automotive steels.
"These investments have created a stronger, more efficient and more reliable platform from which we can meet the needs of our customers, with an improved range and quality of products and services. But steel demand and prices are likely to be under pressure for some years.
"Our business rates in the UK are much higher than other EU countries' and our UK energy costs will remain uncompetitive until new mitigation measures come into effect."
Roy Rickhuss, chair of the UK trade unions' steel committee made up of the Community, Unite and GMB unions, expressed concern over the news.
"We recognise the company has been dealing with a long-term downturn in European steel markets for more than five years. However we have also expressed our own concerns about possible under-manning within Strip Products and in Port Talbot in particular.
"Therefore, it is vital that this is not just an exercise to reduce costs by cutting jobs but takes a considered and objective view as to the numbers required to run and maintain the plant to make steel safely and productively," he said.
Hridayeshwar Jha, director of Strip Products UK, added "This business has achieved some notable technical and engineering successes in recent years. We have introduced new high-value products for customers and we have proved we can produce reliably".
"But we need to improve our competitiveness and flexibility in a tough marketplace to help us further develop a sustainable steel industry in Wales. Today's proposals include a review of all our activities in manufacturing, engineering, technical and the support functions. We will be striving to achieve any redundancies voluntarily."
A consultation process, which will take over 45 days, will begin soon with affected employees and their representatives.