Tata Steel said it will cut up to 720 jobs due to rising electricity costs and a strong pound.
The reduction in employees will be mainly at its steel-bar making plant in Rotherham, South Yorkshire.
The company, which employs around 80,000 people globally, claims UK electricity prices are “more than double those of key European competitors”.
Tata Steel’s subsidiary UK Steel Enterprise will work with those at risk and their trade union representatives to redeploy employees and minimise the number of compulsory redundancies, it said.
It added it is also “refocusing its speciality and bar business on high-value markets such as aerospace”.
Karl Koehler, CEO of Tata Steel’s European operations, said: “Energy is one of our largest costs at our speciality and bar business and we are disadvantaged by the UK’s cripplingly high electricity costs. And while the UK Government announced helpful measures to reduce the impact of its high energy taxes a few years ago, these measures still haven’t been introduced.
“We want to play our role in reinvigorating the UK’s manufacturing industry but increasing imports and high energy costs have further undermined the competitiveness of foundations industries.”
He added the government needs to act on creating a “competitive business environment” and strengthening UK manufacturing supply chains to ensure the UK remains an attractive place to invest.
A DECC spokesperson said: “Keeping energy costs down for business and consumers is a key priority for this government. We are working closely with industry to reduce business energy costs and improve competitiveness.”