COBBLE, one of Blackburn's largest engineering companies, has opened redundancy talks with unions which could lead to 24 jobs being lost.
Managing director Geoffrey Hemingway said a downturn in the world economy and adverse foreign exchange rates had led to a review of the business.
"With our current order book and forward prospects, it is unlikely that we can maintain the workforce at its current level," he said.
"Our market has effectively just stopped for the moment.
"Technology has also moved on.
"Products which we make are faster and more productive than the machines they are replacing."
Cobble, which manufactures tufting equipment, employs 300 people at its Blackburn headquarters and at Oswaldtwistle.
The 24 potential redundancies will affect both the shopfloor and office staff.
Mr Hemingway said it was the company's policy to seek volunteers, but he could not rule out compulsory redundancies.
"We have not done this lightly," he said.
"This is the first down-sizing since I came to Cobble four years ago. Compare that to other manufacturing companies."
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