The company blamed "the extreme deterioration in business levels and confidence around the world".

The announcement comes after thousands of JCB workers last month voted to accept a £50-a-week pay cut in a bid to ward off job cuts.

The company said the global credit crunch had led to a "significant reduction" in orders, particularly from previously buoyant markets including Russia and Central and Eastern Europe.

The jobs to go include 297 shopfloor jobs and 101 staff posts.

JCB chief executive Matthew Taylor said further job cuts could not be ruled out if the economic situation deteriorated further in the coming months.