BAe SYSTEMS is making 150 redundancies in Dorset after losing the £500 million Skynet 5 military communications contract in February.
But despite the job cuts, BAe says it will continue recruiting graduates in the long term.
BAe Systems at Grange Road, Christchurch led the Rosetta consortium which bid unsuccessfully for the MoD's Skynet 5 strategic satellite communications contract.
The company was also hit by more bad news when two other military command and control systems contracts - "Falcon" for the UK and another for an overseas buyer - were also put back a year.
A spokesman said the company was confident of winning those two contracts and that prospects for workers locally would improve next year.
"We are reshaping things to make sure we are viable for the medium- and long-term future."
Some 73 of the 150 job losses will be voluntary but compulsory redundancies have not been ruled out.
A three-month consultation for workers facing redundancy was due to start in June.
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