The firm has has started consultation with around 40 staff at the division about redundancies following a review of the business.
Morgan Sindall managing director Graham Shennan is understood to have written to affected staff saying that the business will be scaled down because of lack of work and future opportunities to tender.
The business will be gradually wound down as existing contracts are completed.
A Morgan Sindall spokesman said: “We can confirm that we have commenced consultation with our piling staff regarding the future of this business. All existing piling commitments will, of course, continue to be fulfilled and completed.”
Morgan Sindall specialised in bored piling from 200mm to 3m diameter and piled and diaphragm retaining walls, operating a fleet of equipment from mini-pile rigs to self-erecting track-mounted hydraulic drilling rigs.
The whole piling sector has been thrown into turmoil in recent months as orders dry up and future prospects look bleak.
Two months ago May Gurney shut its piling business in Norfolk with the loss of more than 40 jobs.
Keller last week revealed its UK operations lost £2.5m last year, although it said it remained hopeful that Crossrail work would support the business through difficult times.
There has also been a shake-up at Balfour Beatty, with the standalone piling and ground engineering business being incorporated in the contracting group’s major civil engineering division.