Defence company BAE Systems has announced that it will cut around 3,000 job due to slower sales of the Eurofighter jet.
The company, which makes the plane as part of a four-nation consortium, said on Monday that it would not comment on the media reports but would update its employees on Tuesday.
It said 3,000 jobs will be eliminated at three factories in northern England in what would be bad news for the government at a time of rising unemployment and sluggish economic growth.
The coalition hopes the private sector will create jobs to fill the gap left by public cuts.
"Whilst there has been a lot of media speculation, it has always been our intention to communicate the results of the review to employees as a priority, and this will take place on Tuesday, September 27," BAE, whose chief executive is Linda Hudson (pictured) said in a statement.
The Unite union, which has 1.5m members in a range of industries, said large-scale redundancies would be a "hammer blow" to Britain's defence industry.
"We will be seeking urgent talks with BAE Systems to try to clarify where these jobs are under threat and to work with them to avoid compulsory redundancies wherever possible," said Unite official Ian Waddell.
BAE employs around 100,000 people worldwide, including 40,000 in Britain.
City A.M. Reporter