Jarvis blames the cuts on delays in engineering contracts
Railway engineer Jarvis is to cut about 450 jobs as its largest customer, Network Rail, reduces spending.
York-based Jarvis, which employs 4,000 staff, also warned that profits for next year would be "significantly below previous management expectations".
It said it had seen a "significant delay and reduction" in new projects.
Executive chairman Steven Norris said: "It has been a painful process to absorb the impact of Network Rail's sudden reduction in workload."
Jarvis, which has 80 depots across the UK, is in consultation with unions over the cuts and gave no further details on affected sites.
Its underperforming rail arm and loss-making freight container operation - which is being closed down - are behind the latest fall-off in trading.
The firm is one of Network Rail's preferred renewals contractors and is hoping for a recovery in workloads during 2010.
Jarvis last week blamed continued poor demand for its decision to shut the container services operation, which launched in 2006 and operated between Thamesport on the Isle of Grain and Doncaster, South Yorkshire, and Birch Coppice, Birmingham.
The firm will instead concentrate on its healthier coal haulage business, which continues to trade in line with expectations.
Jarvis came close to collapse in 2004 after racking up huge debts on over-ambitious bids for Private Finance Initiative contracts.
It was forced into selling off a raft of businesses to survive, but posted a profit of £11.1m for the year to March 2008.