The Linde plant announced £16.5m investment in the plant only recently
An engineering company is planning to cut 88 jobs in a town still reeling from major cuts at one of its most famous firms.
Linde's Merthyr Tydfil factory employs some 400 people making fork lift trucks and large container-handling equipment.
The German company, which recently opened a second heavy truck facility at the plant, blamed the "deteriorating economic climate".
Washing machine manufacturing ended at Merthyr's Hoover factory last month.
Mark Timothy, marketing manager for Linde's heavy truck division, said: "We are undertaking a consultation period and we have 88 positions that we need to make redundant.
"We manufacture container-handling and large fork lift trucks for the Linde Group and because of the economic turn down, that has an effect on the equipment sales."
German-owned Linde's recent £16.5m investment at the Merthyr site included a new heavy truck assembly facility.
"We've just completed what we call the G2 building, an assembly building where we can assemble the very high trucks like cranes," he said.
He added that the company was continuing with its plans to develop and expand its product range.
"This does not affect our existing plans for development," he said.
Graham Smith, regional officer for the Unite union, said the number of proposed job losses - almost a quarter of workers at the plant - was a shock, although he was aware some staff had been working reduced hours.
"To have that number of redundancies was really out of the blue," he said.
The planned job losses are another blow to Merthyr after Hoover ended 60 years of washing machine manufacturing in the town in March.
More than 300 jobs were lost leaving around 100 staff at the site.