BAE Systems, Europe’s largest defence company, has told its staff that 590 jobs will go as it restructures its armoured vehicle operations in the UK.

More than one third of the workers at BAE’s Newcastle facility — the old Alvis Vickers tank factory on the River Tyne — will go as part of the restructuring. The company’s factories at Leeds, Guildford and Telford will also close because orders for armoured vehicles have stalled.

BAE announced in April that up to 500 jobs could go in its UK vehicles division, but it has increased the number by 90 and the axe will now fall harder in Newcastle.

Initially, BAE had said that only 50 jobs would go in Newcastle but this has been increased to 217. The Newcastle facility is gearing up to build the Terrier armoured vehicle for the Ministry of Defence (MoD) next year.

Budget pressures and the UK’s pullback from Iraq have led to a downturn in vehicle orders and BAE has decided to consolidate its operations on fewer sites.

The company has also warned that if future orders are not forthcoming from the MoD, further closures may be necessary.

Upcoming orders include replacing the turrets on Warrior light tanks and building Future Rapid Effects System (Fres) vehicles.

Bids to build the first tranche of Fres vehicles are due to be submitted next Thursday but the whole project could be scrapped if the Treasury demands more budget cuts from the MoD.

Bernie Hamilton, national officer for the Unite union, said: “We have serious concerns about BAE Systems’ and the MoD’s strategy for the building of vehicles for the Army. These job cuts will affect Britain’s capability to build and maintain military equipment.”

Jan Soderstrom, the managing director of BAE’s combat systems vehicles division, said: “The size and structure of the business does not match our predicted order intake.”

Falling orders for BAE’s UK-made equipment has forced the company to announce more than 2,000 job cuts in the past couple of years. In addition to the 590 job losses in the vehicle division announced yesterday, a further 200 went from the same factories last year.

About 90 jobs are set to go at Barrow, where BAE makes the M777 lightweight howitzer for the US Army.

BAE also said earlier this year that it would close Woodford Aerodrome, the home of the Lancaster bomber, in 2012 when work on the Nimrod MRA4 is completed.

This would lead to 630 people being made redundant unless they moved to other factories. A further 205 jobs were cut at Samlesbury, 170 at Warton, and 111 at Farnborough.

Two years ago, BAE said that nearly 600 jobs would go because of falling orders for the Hawk training aircraft. The Hawk programme has experienced a lull in orders and, as a result, 450 jobs have been lost at Brough, near Hull, and a further 134 at Woodford.

The Hawk, used by the Red Arrows, has failed to win recent export competitions, raising concerns about the future of the programme.

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