Union bosses have expressed shock and dismay over the planned axing of around 80 workers at the Sullom Voe oil terminal in Shetland.
Unite Scotland has pledged to “explore every option”, including strikes, in order to save jobs at the plant.
The redundancies are part of a cost-cutting exercise and will affect around 60 full-time staff and 20 contractors at the terminal.
Sullom Voe, which was officially opened by the Queen in 1981, is one of the largest oil terminals in Europe.
In the late-1990s, at the height of the North Sea oil boom, it handled more than a quarter of all UK petroleum production and employed around 500 people.
But the plant is facing an uncertain future, as petroleum giant BP considers transporting gas by tanker directly to mainland or continental destinations instead of by pipeline to Sullom Voe.
Now operator EnQuest, which has been running the site since it took over from BP in 2017, has announced it plans to cut the workforce and alter employment contracts as part of a bid to make the business more cost-effective.
In a statement, EnQuest said it was “committed to maximising the economic life of the terminal as a strategic piece of North Sea infrastructure”.
The statement said: “These changes are essential if we are to make the terminal competitive to retain and win new business, to deliver the required level of service to our customers and to help maximise economic recovery in the UK Continental Shelf.”
The firm has said it is offering a voluntary redundancy process in the hope of avoiding compulsory job losses.
The statement continued: “We appreciate this is difficult for all those impacted, and we will endeavour to make sure that these proposed changes are completed as smoothly and fairly as possible.”
John Clark, Unite regional industrial officer, said: "There has been utter dismay and bemusement following the announcement by EnQuest to reduce the workforce by a quarter.
“The sheer scale of the possible redundancies, which includes 60 full-time employees and 20 contractors, has taken everyone by surprise.
“To add insult to injury, EnQuest are also proposing to weaken the existing terms and conditions of the workforce.
“Unite will not stand idly by and allow jobs to be sacrificed to facilitate a competitive edge for other projects.
“We will explore every option, including balloting our members for industrial action.”
Scottish Labour energy spokesman Lewis Macdonald has hit out at oil and gas industry heavyweights.
“This is yet another example of big business pocketing profits from natural resources whilst local people lose out,” he said.
“Oil and gas produced in the waters off Shetland has been processed at Sullom Voe for years and has supported hundreds of jobs in the process.
“Any further proposals to bypass the terminal by oil majors are already costing jobs in the local community and British-based operators like BP must recognise their social and economic responsibilities.
“Companies which make money from natural resources west of Shetland have a responsibility to ensure that the people of Shetland share in their success and securing jobs at Sullom Voe is the least they can do.”
LibDem MP for Orkney and Shetland Alistair Carmichael said the announcement was “disappointing” but not entirely unexpected.
He added: “The unions and the company must now work together in the best interests of the workers, their families, and the community more widely.
“This process must be handled as sensitively as possible.”
A Scottish Government spokesperson said:“This is devastating news for the workers affected, their families and the surrounding community. In the event of employees facing redundancy, we will provide support through our Partnership Action for Continuing Employment (PACE) initiative.”