The firm wants to become "lean and efficient"

The cuts include 485 posts at the Waterford Crystal plant in Dungarvan, Ireland, which is to close.

Chief executive Redmond O'Donoghue said difficult decisions were "necessary" to ensure the future of the group.

Profits have been falling over the past three years amid slowing US sales and competition from cheaper Asian imports.

The firm's shares soared by 34% to close at 0.05 euros on Wednesday, following the news.

As well as the closure of the Dungarvan plant, other jobs set to go include 160 at its Rosenthal division in Germany.

The majority of the posts are expected to be shed in the UK and Ireland, with job cuts expected too at the firm's flagship plant in Waterford city.

The company also revealed plans for a 100m-euro rights issue, making 1.7 billion shares available at six euro cents each.

'Under pressure'

In March, Waterford Wedgwood issued a profits warning, and said sales in the year to 31 March were likely to be about 6% down on the previous 12 months.

I am determined that Waterford Wedgwood will become the low-cost operator in its sector Chairman Sir Anthony O'Reilly See Waterford Wedgwood's share price

"The whole industry is changing and coming under pressure," said a spokesman for Waterford Wedgwood.

"The restructuring began 18 months ago and this is the final phase to make the company streamlined going forward.

"It should leave the business with a lean and efficient cost base, with some of the most sophisticated plants and products in the world."

Last year Waterford Wedgwood bought UK bone china maker Royal Doulton, a move which it said would boost the competitiveness of both companies and lead to cost savings.

Sir Anthony O'Reilly, chairman of Waterford Wedgwood, said he regretted the job losses but that the company had to move forward.

"These changes are vital to ensure the long term prosperity of this historic company and its key heritage plants in Ireland, England and Germany as we face increasing competition from low cost economies in Asia and elsewhere," he said.

"I am determined that Waterford Wedgwood will become the low-cost operator in its sector."