The company is currently undergoing a 90-day consultation process with workers at Carillion Energy Services (CES) with around 1,500 jobs expected to go following Government cuts to solar power subsidies.

The redundancies are part of a cost cutting drive at the division which was formed following the £306m acquisition of energy specialist Eaga earlier this year.

Carillion confirmed in a trading statement today that restructuring costs would be £40m in a bid to save up to £25m per year by the end of 2013.

The firm said: “We now propose to downsize our solar photo voltaic operations, following the Government’s proposed changes to Feed-in-Tariffs, and to extend the restructuring of CES to deliver a substantial further improvement in overall operational efficiency.

“Total cost savings are now expected to increase from £15 million per annum to £25 million per annum by the end of 2013 and the one-off cost of delivering these savings is expected to increase to £40 million, which includes a provision of up to £10 million in respect of downsizing our solar photovoltaic operations.”

Carillion is continuing to scale back on its UK construction business with a turnover reduction target of one third by 2013 to £1.2bn.

The firm is being more selective about work in a bid to boost margins.

It said: “As a result of tightening our contract selectivity criteria, we also expect the operating margin in this segment to improve significantly this year, with operating profit also moving ahead strongly, despite a substantial reduction in overall revenue due to the re-scaling of UK construction.”

Carillion has targeted Canada as a growth market with plans to double turnover to £1bn within five years and in the Middle East the firm is looking to work in Saudi Arabia after winning its first contract in Qatar.