Ford is cutting up to 850 jobs in the UK in response to the 'serious economic situation' affecting the motor industry.
The majority of the jobs will be cut from its Transit van plant in Southampton, with up to 500 jobs going by May.
Another 350 jobs will be cut from the company's other UK factories.
Ford also announced that it wanted to re-evaluate this year's pay deal of 5.2%, saying that its business situation had worsened significantly since it was drawn up last October.
A statement read: 'Such a serious step would not normally be contemplated, but in these unprecedented circumstances the priority is to ensure a sustainable Ford Motor Company.'
John Fleming, chief executive of Ford of Europe said: 'As demand across the industry continues to fall, we are facing some immediate and major challenges which require us to take decisive action to reduce all our costs, and to do so in ways which will best protect our business for the long term and ensure that we are well positioned to be among the winners when recovery does come.
'Those companies which act quickly in taking the right decisions will be those who not only survive, but who emerge strongest from this deep recession. We aim to be one of those who emerge stronger than before.'