123 jobs under threat at Newport's Orb Electrical Steelworks

More than 120 jobs are set to be axed under plans to restructure a Newport steel plant, say bosses.

A total of 83 direct jobs and 40 contractor posts are at risk at Orb Electrical Steelworks, owned by Cogent Power, a subsidiary of Tata Steel.

The company is blaming reduced demand for products and says it is aiming for a "leaner and more flexible workforce".

Union representatives described it as a "disappointing day" for workers.

Cogent Power managing director Stuart Wilkie said: "This is going to be a difficult time for all concerned but the changes we are making are essential for the long-term future of the operations at Orb.

Tough global market

"If we are to maintain the great steel heritage we have here at Orb, we must act now to compete effectively in these challenging market conditions and to mitigate rising costs in areas like energy."

He added: "We are making these changes to focus on improving the competitiveness of this business and steel making in Wales.

"We are faced with reduced demand for electrical steels and a highly competitive global market place.

"That is unlikely to change in the medium term."

Mark Spencer, a representative of Community union and secretary of Orb Joint Works Council, said: "This is a disappointing day for our members at Orb who have all done their utmost to facilitate the significant changes the business has undergone through the crisis.

'Precarious state'

"We will be working together with management to minimise the impact of the reduction on our members."

Conservative Shadow Business Minister, William Graham AM, said: "Following last week's news that another Newport steelworks has put its staff on temporary leave with half pay, this warning of job losses shows the precarious state of steelmaking in the city.

"I hope the company will enter into talks with the Welsh government and others with a view to saving as many jobs as possible.

A Welsh government spokesperson said: "This is disappointing news, especially as the Cogent operation at Newport has made considerable efforts to drive down costs and increase market share as the steel industry in Europe continues to operate in extremely difficult market conditions.

"As part of Tata Steel, one of our largest anchor companies, we have a strong relationship and regular dialogue with the company.

"We are currently in discussion with senior management at the plant to determine how we may be able to assist with future investment in potential projects that could further help increase the efficiency and innovation of the plant."

The UK Department of Business, Innovation and Skills said: "This is disappointing news for those workers and their families affected by today's announcement.

"Tata Steel has said this commercial decision reflects the challenging conditions in the global steel market, however the company remains committed to the UK."