ASC announced on Wednesday afternoon that the cuts were due to the workforce adjusting to project changes.

“With the competitive evaluation processes for the Future Frigate and Offshore Patrol Vessel projects still in the early stages, it is not possible to maintain the current number of employees on the AWD (Air Warfare Destroyer) Project as production work progresses towards completion,” ASC said in a statement.

“ASC stands ready, willing and able to take part in future submarine and shipbuilding projects and continues to maintain the capability to do so.

“We will continue to brief our employees on the impact of these changes and support will be provided through our employee assistance program and a newly established transition centre.”

About 70 positions will come from the AWD project.

ASC announced earlier that they expected a progressive decline in the workforce between now and the end of the project.

About 40 positions will be cut from the Collins Class submarine maintenance program as the company moves from two submarines in deep maintenance at its South Australian facility, to just one.

ASC said today’s announcement starts a six-week consultation process with the workforce.

“As such, no workers will be departing the business today.”

ASC said fluctuations in workforce numbers were typical on projects such as this.

“Whilst it is always a difficult decision to let people go this is a necessary action to ensure we are able to meet the operational and performance demands of our projects.”

ASC has 2296 permanent employees in South Australia. About 1400 work on the Hobart Class Air Warfare Destroyer project at ASC South and 905 work on the Collins Class submarine maintenance program, the Future Submarine project and within the corporate head office at ASC North.

Independent Senator for South Australia Nick Xenophon said urgent Federal Government action was needed.

Xenophon said the Defence White Paper had “perversely increased the uncertainty for naval shipbuilding in Australia because it failed to rule out an overseas build of the subs, and failed to address the deepening valley of death for SA naval shipbuilding”.

He said the Government’s decision to exclude Australian companies from the $2 billion supply ships tender, instead going to South Korea or Spain, “was a key factor in the valley of death”.