Tata Steel's European unit Corus said on Friday it will cut around 1,500 jobs in northern England as part of a restructuring of its long products unit, which supplies clients including builders and miners.
Like others in the industry, Tata Steel has faced a margin squeeze since last year, as the price of raw materials increases but demand from sectors like construction remains muted.
Tata Steel said the planned shakeup to refocus its business on high-value markets would involve closing or mothballing parts of its Scunthorpe plant in northern England as it cuts costs.
"The continuing weakness in market conditions is one of the main reasons why we are setting out on this difficult course of action. Another is the regulatory outlook," Karl-Ulrich Koehler, chief executive of Tata Steel's European operations, said.
"EU carbon legislation threatens to impose huge additional costs on the steel industry."
He added there was also uncertainty over further carbon cost increases from the UK government, which he warned risked undermining competitiveness.
The job cuts could also affect operations in Teeside, northern England.
Union officials said they recognised the cuts were part of a wider strategic review and added they would work with the company to avoid compulsory redundancies.
Tata Steel's European operations account for two thirds of its global capacity of about 30 million tonne, while the booming Indian operations contribute a quarter. Tata Steel also has units in Thailand and Singapore.
Worldwide, Tata Steel employs 80,000 people.
