Workers at a Melbourne shipyard face a nervous wait after 125 workers were sacked amid fears more will follow as defence contracts dry up.
BAE Systems announced on Wednesday it is cutting 125 jobs from its Williamstown shipyard as projects come to an end, bringing to about 600 the number of workers dismissed since the yard delivered the HMAS Canberra in October 2014.
Premier Daniel Andrews said on Wednesday he fears BAE Systems may close in Williamstown, putting the hundreds of workers still on the site out of work.
"My fear of course is that whilst it's 125 today, it'll be more in weeks and months ahead," Mr Andrews told reporters.
"I think there are grave fears for the future of BAE's operations in Melbourne and therefore the Williamstown shipyard."
BAE welcomed the federal government's decision to announce a continuous shipbuilding program from 2018, but most of the work will be in Adelaide, and has come too late to save the jobs.
All shipbuilding work at Williamstown is expected to finish in early 2016.
Defence Minister Kevin Andrews said the federal government is disappointed by the decision, but has no control over the commercial decisions of companies such as BAE.
BAE's Australian maritime director, Bill Saltzer, said the company will talk to the federal government about the implications of the continuous shipbuilding program.
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