Caterpillar lays off 60 temporary workers at Peterlee; in association with RBS.
The construction equipment maker had already announced the loss of 75 temporary jobs from its plant at Stockton, and 320 from its UK headquarters in Leicestershire. The US-owned business which makes articulated trucks for customers worldwide employs around 1,100 people at the Peterlee site.
The agency staff who have been cut worked in roles across the factory, Caterpillar said. A spokesman added: "Earlier this year we had increased employment in Peterlee in anticipation of volume increases.
"Unfortunately, re-evaluation of market conditions meant this additional employment was no longer required."
The company yesterday blamed "world financial events" and a "general softening in the European residential construction market" for the Stockton and Leicestershire lay-offs.
The decision follows digger and excavation maker Komatsu's decision to reduce its working week from five to three days until the end of July at its Birtley factory, as it cuts production by a quarter because of slowing demand.
It has also laid off 96 agency staff and increased its annual summer shutdown from two to three weeks.