Up to 30 members of staff at Dynex Semiconductor Ltd in Lincoln will lose their jobs after the company admitted financial difficulties.
The firm, based on Doddington Road in Lincoln, say that the job losses are a result of the cancellation of a major contract and the return of product.
In late November 2014, a customer reported a problem with equipment that contained Dynex components.
The company say further investigation was conducted and notice was given to resolve the issue. Despite this, the customer cancelled their contract in January 2015.
The customer also cancelled a related contract that Dynex say had already been place for deliveries.
Dynex said it was expecting its revenue for 2014 to be around (Canadian) $47.1 million, however the contract cancellation resulted in a reduction in revenue of C$5 million.
With the additional loss of profit and costs, the company is now forecasting a net loss for the year of C$5.6 million.
Li Donglin, the Chairman of Dynex said: “The cancellation of such a major contract at such a late time has not given Dynex management any time to respond to it and has destroyed what looked like being a much better set of results in 2014.
“CSR Times Electric is providing its full support to the Dynex team in their efforts to recover from this cancellation so that the business can continue its return to profitability.”
The job cuts as a result of the blow will see the Lincoln members of staff reduced from 351 to 321.
Employees have been informed of the decision to cut up to 30 jobs, and a spokesperson outlined the message sent out to them: “The company is currently experiencing difficulties due to the financial impact of the recently announced cancellation of a major contract and the return of product to the company.
“The result of this is that the business cannot sustain its current manufacturing cost base.
“We have examined various ways that we can make cost savings: however, in order for the business to continue to be viable, the numbers of employees that we can sustain in the foreseeable future must be reduced.
“Regrettably therefore we will now have to consider the loss of up to 30 job roles and we will now commence consultation with the recognised union Unite.”
Dynex designs and makes high power bipolar semiconductors, insulated gate bipolar transistor (IGBT) modules and electronic assemblies.
The firm opened their £1.8 million research and development (R&D) centre in August 2012.
At the time, it employed around 315 people and created around 40 new skilled engineering jobs.