UPDATE 2.30pm Fortescue Metals Group workers at its Pilbara operations were being told today who would keep their jobs, with the company holding all-staff meetings to announce the latest wave of layoffs.
Fortescue took the unusual step of temporarily stopping work at its sites to allow managers to address the workforce as a group.
Fortescue yesterday would not confirm the meetings but this morning, FMG chief executive Nev Power addressed workers at the Solomon hub.
The ABC reported that several hundred contractors at the Solomon site had already been sacked.
In an interview with the ABC, Mr Power said he was sorry for the job losses.
"What we've had to do given the very low iron ore price that we're seeing come through from China - and that's driven by some poor economic conditions there - we've had to take very quick and decisive action to restore our profitability and to reduce our capital expenditure to ensure that we've got the financial strength to continue running the company and expanding our operations," he said.
"So we have taken the decision to defer the development of our Kings project at Solomon.
"That was a 40 million tonne per annum project due to be brought on stream by June of next year.
"We're deferring that by three to four months to reduce the capital expenditure there.
"Now that won't result in too many contractors being reduced but it will reduce the level of ramp up that we do, and you must remember that we've ramped up very dramatically with our number of people.
"In addition to that we have reduced operating costs around the business to restore profitability and we've reviewed all of our operations including in terms of our employees, our contractors and consultants.
"So we have had to let go several hundred employees and several hundred contractors from across our operations and that is an extremely sad time for us at Fortescue but we've been forced to that by the dire market conditions that we find ourselves in."
One contractor has told the national broadcaster that staff were called in earlier this week and told to check a list of names pinned to the wall.
"The people whose names were on there were told they'd been sacked," the contractor told the ABC
"Some people were crying, it was pretty awful."
Much of the speculation around job losses centred around the Cloudbreak mine.
Earlier in the week Fortescue chief financial officer Steve Pearce said that cash costs at Cloudbreak were estimated at $50 a tonne.
Sources say the mine is unprofitable if spot prices fall to $US80/t. Prices in China were $US86.70/t yesterday.
This week's Fortescue jobs cull also extended deep into management ranks. As revealed by WestBusiness yesterday, long-term executives recruited by founder and chairman Andrew Forrest found they were not immune, with joint company secretary and investor relations head Rod Campbell and government relations executive Julian Tapp among the departing.
In addition, Fortescue slashed the ranks of its senior legal team, making group legal manager Andrew Barclay and senior legal counsel Ann Marie Lowry redundant.
Both had been with the company more than five years.
More recent senior executive appointments, including director of external affairs Deidre Willmott and chief information officer Vito Forte, have survived the cull.
Mr Forte's department at the Fortescue head office was one of the worst hit, sources say, with more than a third of the IT division axed.
One former Fortescue employee said even the human resources department appeared to have been caught short by the sudden and savage cuts, with some staff not being given a formal letter terminating their employment before being escorted from the building.
FMG shares recovered this morning in early trade as the resources sector lead the market higher.In late trade, FMG was up 11.4 per cent, 35 cents, to $3.31.