BlueScope Steel has announced plans to cut 170 jobs at its Western Port facility in Hastings, south of Melbourne.

About 110 employees and 60 contractors will lose their jobs over the coming months.

Workers returning from leave were told the news this morning.

BlueScope says it will begin the consultation process with employees and union representatives to manage the transition and intends to offer a round of voluntary redundancies.

The company has blamed the job cuts on a downturn in domestic demand and a drop in exports due to the high Australian dollar.

BlueScope says the changes are part of a restructuring of its cold rolling, metal plated and painted steel production, which will see output fall to meet lower demand.

"We will keep all currently operating lines and assets open at Western Port to provide flexibility and allow for additional throughput when demand improves," said BlueScope's head of Australian and New Zealand operations, Mark Vassella, in a statement.

The decision comes after scores of redundancies at the company 15 months ago.

In November 2011, more than 200 workers were sacked from the Western Port plant, most taking voluntary redundancies, but this time the Australian Workers Union says many of the redundancies may be involuntary.

Unhappy new year

AWU secretary Cesar Melhem says this announcement is likely to be far worse for workers than the previous round of job cuts.

"More than likely to involve some forced redundancies, and people will struggle to find a job in the current environment," he said.

"I was hoping 2013 would be better than 2012, but it's not a good start."

Mr Melhem says workers are devastated by the news and especially the timing of the announcement.

"They're not taking the news very well. Mind you, just came back after Christmas, most of the people came back today with the news," he said.

"They'll go home today and tell their wives and husbands they don't have a job, so it's going to be quite devastating."

Worker Shane Burd says he and his workmates are shocked.

"Again, again, we have to go through this again," he said.

The redundancies will take effect from mid-March.

However, Mr Melhem says the decision to keep all the production lines open may mean that some of the lost jobs will be reinstated if demand for steel products improves.

"That's the only good news in this announcement, they're not closing any lines so that's pleasing," he said.

"They're going to invest in the business, some $100 million in new product, so that's very positive.

"So I'm hopeful when the market picks up again, some of these workers might get their jobs back."

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