More than 100 jobs have been cut from South Australian defence shipbuilding company ASC.
The company has let go 101 contractors from its facility in Adelaide in a move it says will increase productivity on its air warfare destroyer program.
"This contractor management activity is normal practice for projects of this nature and has, and will, occur several times over the life of the project," it said in a statement on Friday.
South Australia's Defence Industries Minister, Martin Hamilton-Smith, said the job losses highlighted the perilous future of naval shipbuilding in Australia, where $250 billion in work was at stake.
"This news is extremely disappointing for the workers and their families," he said in a statement.
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"Federal government indecision on defence procurement is causing job losses at Melbourne-based BAE Systems Australia, Newcastle-based Forgacs and Adelaide based ASC."
Mr Hamilton-Smith is also calling on Prime Minister Tony Abbott to provide certainty for the shipbuilding industry when he announces a restructure aimed at closing the gap between projects.
"What we need now from the federal government is the delivery of a 30-year continuous strategic ship building plan for Australia to rescue an industry which is hanging on for survival," he said.
Independent South Australian Senator Nick Xenophon says even more submarine manufacturing jobs remain at risk.
"If the federal government is fair dinkum about turning this around, it needs to immediately scrap the nonsense of a so-called competitive evaluation process for the future submarines that has the option of an overseas build," he said.
