The economy in Northern Ireland has suffered another body blow after Larne-based engineering firm FG Wilson announced it was cutting 260 jobs.

The company, owned by US-based Caterpillar Group, blamed a cut in worldwide demand for the electricity generators which it manufactures. A spokesman said they hoped to minimise the number of compulsory redundancies by offering workers the possibility of voluntary severance.

Last month, FG Wilson said it was axing the jobs of 185 agency workers.

Yesterday’s announcement comes as the local retail sector is absorbing the news that international company Marks & Spencer is to axe its outlet in Newtownards, with the loss of 37 jobs.

And in the Republic, it was announced yesterday that the American computer giant Dell is cutting 1,900 jobs at its plant in Limerick.

Overall, FG Wilson employs 3,000 people, of whom 300 are agency staff, at its plants in Larne, Monkstown and Springvale in Belfast.

The company spokesman said the majority of the 260 job losses would be among the permanent workforce at its headquarters in Larne. In total, 138 jobs will go in Larne, 45 in Monkstown, 50 in Springvale manufacturing and 27 at the Springvale offices.

A company spokesman said it had notified the Department of Enterprise of the proposal to shed jobs.

This move triggers a 90-day consultation period during which the company will consult with trade unions.

A statement from FG Wilson read: “Last month we released a significant number of agency workers. Unfortunately, market conditions have continued to worsen and we need to lower our production volumes further to take account of the reduced demand for our products.

“As a result, we are proposing up to 260 redundancies in our permanent workforce.

“This is subject to consultation with employees and their representatives.”

Alliance Party enterprise spokesman Sean Neeson MLA said the further job losses were a real blow.

He said: “This news is a massive blow to several areas of Northern Ireland.

“The news on the employment front seems to be going from bad to worse, so the Stormont Executive needs to look to radical ways to boost the economy.”

Shock as Dell sheds 2,000 jobs in the Republic: Business, page 32