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Tata Steel logoReuters

Tata Steel has said it would cut about 400 jobs in Port Talbot, South Wales, in order to save costs and sustain itself in the European market amid lower demand.

The job cut is part of the India-based company's efforts to improve the competitiveness of its South Wales steelmaking business. The company is looking to review its manufacturing, engineering, technical and support functions.

"Steel demand and prices are likely to be under pressure for some years. Our business rates in the UK are much higher than other EU countries' and our UK energy costs will remain uncompetitive until new mitigation measures come into effect," Karl Koehler, Tata Steel's European chief executive, said in a statement.

"These proposed changes then are vital if we are to build a competitive future for our Strip Products business in the UK."

"We will, of course, engage fully with employees, trade unions and our political stakeholders during this restructuring process. And we will do everything we can to support our employees through this unsettling time."

A consultation process, which will take more than 45 days, will begin soon with the affected employees and their representatives, according to the company.

Roy Rickhuss, Chair of the UK trade unions' steel committee which is made up of the Community, Unite and GMB unions, said: "We are obviously very concerned to hear this news and we will do all we can to support those affected by the announcement."

Rickhuss noted that Tata Steel has faced a long-term downturn in European steel markets for more than five years.

"This news also demonstrates that despite the government's trumpeting of economic recovery, the steel sector remains under real pressure. This sector, vital for so much of British manufacturing, must be an area of real focus for the UK's industrial policy," he said.

"We will be seeking an urgent meeting with the company to discuss our concerns about manning levels and reiterate our opposition to any compulsory redundancies."

In 2012, Tata Steel cut 600 jobs in Wales. The company currently employs about 7,000 staff in Wales with just over half working at Port Talbot.