Corus has confirmed it is cutting 3,500 jobs from its global workforce, with 2,500 going in the UK.

The Anglo-Dutch company, which employs 24,000 people in the UK and has steelmaking operations at Port Talbot, Scunthorpe and Teesside, has been hit by a downturn in its main markets - construction and car manufacturing.

John Wilson, senior officer of the GMB union, said: "This is a body blow for UK manufacturing."

A mill in South Wales will close and its engineering steels businesses will be restructured which will affect factories including Rotherham in South Yorkshire.

Costs in finance and human resources will be reduced by around 20 per cent and changes will also be made to the company pension scheme.

The company said the measures would improve profits by more than £200 million.

Corus management had already devised a gradual restructure of the business, but the plan was brought forward by the crisis in the world steel industry.

Steel prices, which had been driven to record highs by demand from China, have more than halved in the last year.

The company is Europe's second-largest steelmaker and the ninth largest in the world.

It was formed a decade ago from the merger of British Steel and Dutch firm Hoogovens. Two years ago it was bought by Tata Steel, sister company of Tata Motors, the owner of Jaguar Land Rover, for £6.7 billion.

Meanwhile, Jaguar Land Rover is also understood to be considering another 1,500 layoffs.

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