Tata Steel has announced plans to make its UK business “self-sustaining” while selling its Dutch operations.
The Indian giant said that it was no longer prepared to sustain the loss-making operation and would instead begin to break up its European operations.
Tata employs 7,000 people in Wales, including 4,000 at its plant in Port Talbot.
The Welsh government said that the decision was “extremely worrying”.
Tata also said that it was in early stage discussions with Swedish steelmaker SSAB about buying its Dutch operations.
“SSAB has participated in several different discussions concerning consolidations in the European steel industry,” it said.
“The discussions with Tata are ongoing but no decisions have been made.”
The company has been in talks with the UK government for months over a £500m rescue package to continue operating.
On a conference call, officials said that they were pursuing “all options to make the business self-sustaining”.
The emergency funding was being pursued under the government’s Project Birch initiative, which looks to provide financial support for businesses deemed of critical national importance.