Nearly 650 jobs are to go as part of a redundancy programme at JCB, the digger company, as a result of the housebuilding slump.
The jobs will go mainly from manufacturing (500) with the rest made up from other areas of the business.
A huge decline in orders, particularly from the construction market, has led to a 20% drop in forecast production schedule this year.
Based in Rocester, Staffordshire, JCB has 11 factories around the country.
Group chief executive Matthew Taylor says the job cuts will help ensure that the company remains competitive and in a position to benefit from an upturn when it occurs.
“However we do not expect to see a recovery until late 2009 at the earliest,” he said.