A business review which concluded that there was no prospect of new UK armoured vehicle manufacturing work once production of the Terrier ends next year. BAE said Newcastle site would close at the end of 2013.
Managing director Charlie Blakemore said:
We need to adapt to very challenging market conditions and further reduce our overheads to drive better value for our customers and increase our competitiveness in the export market.
I know that this is difficult news for employees and we will do all we can to help them through this difficult period and mitigate the proposed job losses wherever possible.
The firm said the proposals, now under consultation, followed major efficiency improvements and reductions in the amount of ammunitions required by the Ministry of Defence.
More top news
Former Newsnight presenter Jeremy Paxman has said he no longer watches the programme but revealed he's a fan of dating show Take Me Out
Prince Harry will miss the birth of his new niece or nephew as he has flown back to Australia.
Myleene Klass is set to shock Countdown fans by giving a naughty eight-letter word as her answer on tonight's show.