Premier Colin Barnett has warned more workers could lose their jobs this year, after the collapse of engineering group Forge and a jump in the state's unemployment rate.
At least 1300 Forge Group employees on power stations and mining projects in Western Australia and Queensland were retrenched yesterday, after the engineering company's clients cancelled their contracts.
And the latest unemployment statistics showed jobless figures in WA have jumped to 5.1 per cent from 4.6 per cent.
Mr Barnett said while he hoped Forge workers would be able to find jobs at other major projects in WA, there could be more pain to come.
"(I am) sorry to see the job losses at Forge. They are spread across Australia and I would hope that most of those who lost their jobs in this state would be re-employed on new projects or existing projects," Mr Barnett told thewest.com.au.
"I expect (Gina Rinehart's) Roy Hill project to get under way shortly - that's a new, $10 billion project, and other projects will also get under way shortly.
"However, the figures this morning showed a rise in unemployment both nationally and within this state, and I think we will see unemployment rise this year."
Forge is on the verge of being delisted from the Australian Securities Exchange, just two days after its financiers, including ANZ Bank, announced they had withdrawn their support for the company.
Receivers KordaMentha said 1300 employees on power stations and mining projects in WA and Queensland were retrenched on Wednesday, after the principals of the construction jobs exercised contractual rights on the projects.
Forge's clients include mining giants Rio Tinto, BHP Billiton and Gina Rinehart's Roy Hill Holdings.