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
Government minister Justine Greening has apparently opened up about her sexuality, as thousands took part in the London Pride parade.
Record crowds are at this year's Pride in London parade as people show their support for the LGBT community after the Orlando shooting
After a showery start to the day, parts of Northern Ireland, western Scotland and south-west England will see drier conditions.