Economic circumstances are extraordinarily challenging, having been compounded by the events of 11 September

Redmond O'Donoghue, chief executive, Waterford Wedgwood

The job losses will come across the company's operations in UK and Ireland.

The main casualty will be the firm's crystal manufacturing plant at Stourbridge, in the West Midlands, which will close with the loss of 220 jobs.

A further 1,000 jobs will be cut in the UK, with half of those going from the Wedgwood factory at Stoke-on-Trent, Staffordshire.

Restructuring plan

The remaining job losses will come in administration and retailing in the UK, with a further 100 to go from the company's operations at Waterford, in Ireland.

There will also be job cuts in Germany, Australia, Japan and the United States.

The Irish-owned company said it was closing 40 "underperforming" shops in the UK.

Waterford Wedgwood employs 10,000 staff at factories in UK, Ireland and Germany.

The group said the job losses are part of a restructuring plan.

It says it hopes most of the lay-offs will be achieved through natural wasteage but it could not rule out compulsory redundancy.

New stores

Waterford Wedgwood said it plans to open 10 new stores in the UK and refurbish its remaining stores.

"Similar actions, on a smaller scale, are planned for Germany and South East Asia," it added in a statement.

The company said weaker trading conditions in July and August had been compounded by world events since 11 September.

The group's former president Redmond O'Donoghue has been named as its new group chief executive.

Tony O'Reilly Jr has been appointed chief executive of Wedgwood.

'Challenging times'

In a statement, Mr O'Donoghue said: "Economic circumstances are extraordinarily challenging, having been compounded by the events of 11 September.

"Challenging times require decisive action.

"Today (Wednesday) we are announcing a programme which is designed to protect our future profitability, to reduce operating costs, to enhance factory effiency, to balance supply and demand and, in this way, protect as many jobs at Waterford Wedgwood as possible."

The company was formed in 1986, with the merger of Waterford Crystal and Wedgwood.

In 1998 it acquired an 85% share in German group Rosenthal.

Struggling industry

The ceramics industry is one of the traditional mainstays of the West Midlands economy.

But some of its biggest names, including Wedgwood and Royal Doulton, have struggled in recent years.

Cheap imports, the strength of the pound and changing consumer trends, with a move away from set-piece family meals to more casual dining, have all hit profits.