Portsmouth shipyard to close as BAE cuts 1,775 jobs It added: "Under these proposals, shipbuilding operations at Portsmouth will cease in the second half of 2014. Subject to consultation, Lower Block 05 and Upper Blocks 07 and 14 of the second Queen Elizabeth Class Aircraft Carrier will be allocated to Glasgow. BAE stressed it would not be breaking ties with Portsmouth, where it bases its maritime services wing and also operates the Portsmouth naval base, together employing 4,100 people. "The company remains committed to continued investment in the Portsmouth area as the centre of its maritime services and high-end naval equipment and combat systems business," it said. However, it will cut 940 jobs in Portsmouth - fewer than the 1,200 employed on the carrier programme - in 2014. A further 835 jobs will go "across Filton, Glasgow and Rosyth, progressively through to 2016," BAE said. It added that "the cost of the restructuring will be borne by the Ministry of Defence." The decision on Portsmouth ends centuries of naval shipbuilding in the city. Vessels from Henry VIII's Mary Rose to the galleons that drove off the Spanish Armada and the HMS Dreadnought, the first modern battleship, were built in the south-coast city. BAE has also negotiated an interim deal with the MoD to fill in some of the workload gap, announcing that it had been awarded a contract to make three offshore patrol vessels - a stop-gap before the start of the Type 26 programme. The defence manufacturer also confirmed reports earlier this week that it had renegotiated the current aircraft carrier contract, so that the companies involved in the project share any cost over-runs with the taxpayer on a 50:50 basis. BAE said "the revised contract reflects the increased maturity of the programme, with structural assembly of the first of class vessel now substantially complete." BAE shares rose 2.05 to 455.35p following the announcement. The news was greeted with concern by the unions. Garry Graham, deputy general secretary for Prospect, the union for defence specialists, said: "For an island nation and in this time of increased global uncertainty, we should be seeking to maintain our shipbuilding capacity, not reduce it. Job losses of this scale will have a devastating impact upon local communities and economies. These are the very type of highly skilled jobs which should be leading us out of recession and helping create growth in the economy. Jamie Webster, convener of the Confederation of Shipbuilding and Engineering Unions at the Govan yard in Glasgow, stressed that the Clyde would also suffer big job losses: "Obviously it's not a good day for the Clyde and for colleagues in Portsmouth. It's a disastrous day and my heart goes out to them. We're just workers, the same as them. There was earlier speculation that Portsmouth could be reprieved as a shipbuilding hub for England if Scotland was to vote in favour of independence.