A DEFENCE firm is axeing 230 jobs from its site in Malvern – a reduction of the workforce by a fifth at the town’s biggest employer.

QinetiQ said a total of 391 jobs will be cut nationwide under a restructuring of the business and has blamed ”challenging” market conditions for the losses.

The firm, which specialises in defence security, research and aerospace technology, employs 1,200 workers at Malvern Technology Centre, in St Andrew's Road.

Workers at the firm’s headquarters in Farnborough, Hampshire will also be affected by the cuts. A further review of the remainder of the business will take place over the summer, including discussions with QinetiQ's primary UK customer, the Ministry of Defence.

A spokesman for the firm said the losses will be very “unsettling for the community” but said cuts were inevitable due to a reduction in public sector spending by the new coalition Government.

He added the MoD’s research budget had already been slashed by £100 million over the past two years and less emphasis is being placed on the scientific research which is carried out by experts based at Malvern.

The firm, which employs around 6,500 workers in the UK, will cut jobs by reducing the number of management roles and duplicate positions where more than one person are doing similar jobs.

QinetiQ has now begun a 90-day consultation with trade unions to discuss the terms of the redundancies.

Chief executive Leo Quinn said: “As we announced in May, our markets are likely continued on page 2 to remain uncertain for some time, but we have a decisive programme of self-help to restore value. We are acting to make our costs more competitive and improve our productivity.

"We are reshaping QinetiQ to focus on our strengths so that we are better aligned with customer needs. Whilst we have no choice but to review the cost base of our business, our goal is to remain a full service provider and we will work with our customers, including the Ministry of Defence, to ensure that we maintain this capability."

Harriet Baldwin, Conservative MP for West Worcestershire, said she has already held an “urgent” phone call with the QinetiQ boss.

She added: “I am immediately concerned for the welfare of local people who will lose their jobs in this restructuring.

“QinetiQ is an important local employer and an important anchor for technology businesses in the area.”

Prospect, which represents most of the workers at the Malvern site, said it feared it was the "tip of an iceberg", with more cuts to follow in the coming weeks.

National officer David Luxton said: "Our members in QinetiQ give a technological edge to our armed forces which is evident in current military operations. The loss of so many skilled and innovative scientists and engineers will inevitably impact on the UK's defence capabilities.

"QinetiQ has today begun a 90-day consultation with the unions, initially on 391 job losses, but it is expected that over 700 jobs will disappear during that period."

The QinetiQ spokesman said they could not rule out further losses but said the aim for the next 18 months is to get the company on a sound financial footing while keeping costs under control.