The French car components group, Montupet, is to make 97 people redundant at its Calcast plant in Derry.
Montupet, which acquired Calcast, formerly known as Transtec, out of receivership last October said it was "rationalising" the workforce to make the plant more competitive.
The French group has recently completed a £20 million (€25.4 million) investment programme to update plant and machinery at Calcast, where 300 people are employed.
Montupet believes its decision to cut jobs will help safeguard the remaining 240 workers at the plant.
It is one of two operations owned by Montupet in Northern Ireland, which currently employs more than 900 between Derry and Belfast.
The group's Dunmurry plant, on the site of the former DeLorean factory, currently produces five different cylinder heads for a number of car manufacturers including Peugeot and Renault. The Calcast plant in Campsie makes the engine heads for the Ford motor company's Explorer model.
The plant exclusively produces cylinder heads for the Explorer and does not currently manufacturer any other product.
The French group had been forced to introduce a period of short working time at its Derry operation earlier this because of a dispute between Ford and the tyre manufacturer Firestone.
The dispute disrupted assembly of the vehicles at Ford's German plant in Cologne, which is the key customer for Calcast's cylinder heads.
Mr Daniel Cofflard, Montupet's managing director in Northern Ireland, had said production at the Derry plant was expected to return to normal after the summer.
Workers and trade union leaders were surprised by the French group's decision because Montupet. The redundancies are the latest blow for the Calcast plant. Montupet agreed to buy the operation last year after it had been in receivership for 10 months. Then trade union leaders in Derry hailed the French group as a white knight, but now they are not convinced that the 97 job losses will be the last.
Mr Uel Adair, an official with the Amalgamated Electrical and Engineering Union said he has received no details, but expects the redundancies to take place before November.
