Around 58 jobs are under threat of redundancy at the Hebburn-based shipyard of A&P Group.
The ship repair and conversion specialists said shedding jobs was necessary to secure the future of the yard.
Final numbers are yet to emerge as the company has now entered a 30-day consultation period with the trade union and elected employee representatives. Union officials are due to meet with A&P Tyne management this week to discuss the proposals.
A spokesperson for the firm said: “A&P Tyne has entered into a period of consultation during which it will review the number of people employed at its site in Hebburn.
“The reduction in workforce is part of a restructure at A&P Tyne that will enable the business to remain competitive in a challenging, global marketplace.
“A&P Tyne needs to respond to peaks and troughs in demand. Ship repair work is subject to fluctuation and the restructuring will ensure that staffing costs adjust to tally with fluctuating ship repair income, to secure the future viability of the yard.”
In its 2013 accounts, published late last year, A&P Group reported “highly pleasing” results, despite tough trading conditions.
The firm, which also operates bases in Middlesbrough and Falmouth, turned over £111.3m.
Unite regional officer Dave Telford said: “We are having our first meeting with the management of ship repairer A&P Tyne at Hebbum on Wednesday over the redundancy plans that could affect 58 jobs.
“We are very concerned that the company is still using agency workers on contracts when our members’ full-time jobs are under threat and will be raising this tomorrow with management.
“Unite will do all it can to avert job losses of our members at this difficult time for them and their families. After Wednesday’s meeting, we will have a clearer picture and will be able to comment more fully.”
In November 2014 workers at the Wagonway Road yard completed work on 3,500 tonnes of parts for the HMS Prince of Wales aircraft carrier, on behalf of BAE Systems.
A&P said the Royal Navy contract, the biggest in the firm’s history, had provided a “massive boost”, with more than 400 people devoted to working on the project.
The Tyneside yard also secured £3m of work from BAE Systems to make submarine sections and in March A&P saw the oil and gas support vessel Bibby Polaris arrive in Hebburn for a ten day dry-docking for repairs and painting of its hull, decks and helideck.
Just last month Labour’s Jarrow Parliamentary candidate, Stephen Hepburn, visited the site with Labour shadow defence secretary, Vernon Coaker, to see the work being carried out there.