Employees were told of the company’s intention to cease manufacturing of low volume and high complexity products made at the Gourdie site, where more than 600 jobs were lost to Hungary in 2007.

NCR also proposes to reduce staff levels in engineering, solutions marketing and support functions. Around 450 posts are being retained, mainly in research and development.

NCR’s vice president of global manufacturing Rick Marquardt said, “Like many companies, we have taken a number of prudent steps to better manage our cost structure in recent months.

“However, based on the current business outlook, we now need to make the difficult but necessary decision of proposing further workforce reductions in Dundee in order to protect our position.

“We realise these changes will bring challenging times for those employees affected and we are committed to helping any individuals affected with comprehensive outplacement support.”

NCR is beginning a 90-day consultation process on the proposed restructuring with union and employee representative groups in Dundee.

Under the proposals, NCR’s remaining business activities in Dundee will focus on engineering, research and development, services support operations, solutions management, marketing and new product introduction.

Convener of Dundee City Council’s economic development committee, John Letford, said, “The fact NCR has made this announcement in the current financial climate cannot be a surprise to anyone, but that is no consolation to the people who now find themselves looking for work.

“NCR has a long and proud connection with Dundee, and that is being maintained with the retention of the research and development section at Kingsway West.

“That is not much comfort to those affected by today’s news, but the company is looking to its own future and the future of the city by retaining this facility here.”

The announcement comes less than a month after the US-based company — which posted worldwide revenue in 2008 of $5.32 billion — said it planned a temporary halt in production in Dundee.

Gourdie was the only factory in the company’s global network affected, and staff at the time said they had fears for their long-term job security.

It emerged today employees at the plant have been engaged in a stock-taking exercise this week.

Dundee West MP Jim McGovern said he would be seeking a meeting with the Chancellor Alistair Darling to discuss any financial assistance for the company that might be available.

“My initial reaction is I am gutted for the staff there that are losing their jobs,” said Mr McGovern.

“They are the priority, and I‘ll be speaking to council administration leader Kevin Keenan to see what Dundee City Council can do.

“I will also be speaking to the PACE group that was set up previously at NCR about help that can be given to people to get back into work as quickly as possible.”

The constituency MP said he was “extremely disappointed” the company had not given him any indication of the cuts and the ending of manufacturing prior to today’s announcement.

“I will be speaking to (operations director) Allan Valentine this afternoon,” said Mr McGovern.

“If it is financial — and I won’t know that until I meet Mr Valentine — then with the banks almost nationalised now I want to see what they can do to help.”

Speaking outside the factory, Dundee West MSP Joe FitzPatrick said he was “absolutely devastated”.

“This is a heartbreaking blow,” he said. “We really thought we had turned a corner. Staff in there have sweated blood to make this factory successful and it is the bedrock of the Dundee manufacturing industry.

“My office is now trying to get urgent meetings with management and I have spoken to the First Minister’s office to make him aware of the situation so that any support that can be given by the Scottish Government to the staff at this difficult time is done.”

Staff at the manufacturing facility at Gourdie were allowed away following the announcement but work continued at the firm’s research and development base, Discovery House.

NCR spokesperson Lucy Gilchrist would not comment on whether individuals had been told they were to be made redundant.

She said that process would form part of the consultation to begin next week.