Chinese authorities have said they expect to cut 1.8 million jobs in the country's steel and coal industry.
Human resources and social security minister Yin Weimin told a news conference on Monday (29 February) that the cuts will affect 1.3 million coal jobs, while 500,000 steel workers face redundancy.
The layoffs come as China's factory-led economy has slowed down significantly over the past year after the country has suffered slumps in its manufacturing industry.
The move has indicated that country will shrink its steel and coal production, which has caused commodity prices to plummet. Steel workers in the EU have blamed 'Chinese dumping' of cheap, subsidised steel for the crisis that led to tens of thousands of workers losing their jobs in Europe.
"The economy faces relatively big downward pressures and some firms face difficulties in production and operation, which would lead to insufficient employment," Yin said.
The coal and steel sectors employ about 12 million Chinese workers collectively, according to China's National Bureau of Statistics (NBS). The 1.8 million workers represent about 15% of the national steel and coal workforce.
Yin said the move is expected to cost about 100bn Chinese Yuan (£10bn) as it seeks to help companies resettle workers. The government had no specific idea regarding the timing of the job cuts.
"It's difficult to predict a time frame but it will not be a quick process," he told the conference. "There are many issues to be dealt with, including how to pay debt as well as layoffs."
During the economic crisis, an estimated 28 million Chinese workers were laid off. The government signalled it is not expecting mass layoffs like before. According to the NBS, the unemployment rate held at 5.01% at the end of 2015.