Up to 250 jobs are set to be axed at a factory making trains in County Durham.
The Hitachi plant in Newton Aycliffe opened in 2015 and employs about 900 people, according to the union Unite.
In December it was awarded a £350m contract to assemble 23 125mph intercity trains for Avanti West Coast, but three months earlier lost out on a contract for the Tyne and Wear Metro.
The firm said a consultation with staff was under way, and it was working with the union and local business groups.
Unite officials said it was “devastating news” which had come “completely out of the blue”.
Hitachi said in a statement the workforce would be “resized to a team of skilled, core full-time employees”, and there might be opportunities for a number of staff to be redeployed to other parts of the business.
The move would allow train building projects to be delivered – the plant has orders for 61 new intercity trains with the first work due to begin later in 2020 – but also provides “flexibility to be scaled-up with staff on fixed-term contracts according to order demand”.
The statement added: “Hitachi has a proud record investing in developing and training its people.
“While it is disappointing to be reducing jobs at Newton Aycliffe, if demand increases in the future there may be opportunities for rehiring.”
Pat McCourt from Unite said: “It represents the loss of almost a quarter of the workforce, and is particularly bad timing coming on the back of Christmas when waiting for bills to drop through the letterbox.
“This is not about Hitachi or the world-class facility we have here, it’s all about the government’s procurement strategy.
“This means UK-based manufacturers are at a disadvantage when tendering for contracts, and they’re going abroad.
“We need to see the newly-elected government – and the newly-elected MPs – stepping up to protect UK manufacturing.”
Paul Howell, the newly-elected Conservative MP for Sedgefield, posted on Facebook: “The news of potential job losses at Hitachi Rail is disappointing and I feel for employees receiving today’s most unwelcome news.
“At this stage it is a consultation and I am assured that Hitachi will work with all parties to look at opportunities to mitigate the impact to employees.
“I have spoken at length with Hitachi Rail and I have been personally assured that Hitachi Rail remains completely committed to Newton Aycliffe, the North East and the UK.”
“I will be meeting with them next week for further discussion.”