Alfred McAlpine has accused senior managers at its quarrying business in Gwynedd of committing "extensive and systematic" fraud at the business.
The fraud went undetected for several years, the firm said
An external investigation found that managers had overstated production volumes and sales for several years.
Police have been asked to investigate alleged malpractice costing £40m at the firm, which produces slate for roofing.
One manager at Penrhyn was dismissed, another faces a disciplinary hearing and five others have left the company.
A quarry at the centre of the incident has been temporarily closed and the firm is cutting more than 160 jobs at the business.
Alfred McAlpine uncovered the suspected fraud in February and appointed forensic accountants Ashurst and Deloitte to investigate.
The probe concluded that the firm had been defrauded of nearly £23m by a group of managers who had colluded to inflate its results.
The fraud went undetected for a long time despite both internal and external audits.
The firm's former managing director has been dismissed, while its operations director is currently being disciplined.
Five other senior managers would have also faced disciplinary proceedings if they had not left the company.
An investigation concluded that "personal gain was not the underlying motivation for the fraud."
North Wales Police are now investigating the case.
Alfred McAlpine said it believed the managers involved were not motivated by personal gain and that it had ruled out civil proceedings on the grounds that these were unlikely to recover any significant amount of money.
After writing down the value of the slate business and factoring in the cost of the investigation, the whole episode will cost the firm £40.4m.
"The extent of the fraud and cover-up within slate has been a shock to us all and is most disappointing," said Ian Grice, Alfred McAlpine's chief executive.
"But we have responded quickly and decisively."
He said the job losses were regrettable but added: "It is essential that we stem the losses and secure the future of the business and the interests of the 270 jobs.
"A lot of local jobs and a lot of local people have been affected."
A new management team has been put in place at the business, which is now expected to make a £5m loss this year.
Alfred McAlpine said the accounting probe had also examined the financial controls in place at the parent company and given them a clean bill of health.
However, Alfred McAlpine's finance director Dominic Lavelle has resigned.
Mr Grice said the fraud had "overshadowed" what would otherwise have been a successful year for the business.
Profits fell last year to £17.6m from £27.6m in 2005 while sales rose 5% to £1.1bn.
The firm's shares fell more than 1% after news of the scale of the alleged fraud emerged.