Nestl Rowntree process workers reeling from the latest job losses have been warned that "unsustainably high" absence levels are threatening many more employees' long-term job security.

A memo to staff from general manager Ian Jobson - leaked to the Evening Press in the wake of news that 150 jobs are to be axed - says the factory is experiencing more competition than ever before for both home trade and exports.

"To compete in this environment, we need to do things differently than we have in the past, and address some of the underlying issues, including absence."

But angry workers have contacted the paper to claim that the job losses - reported in later editions of yesterday's paper - have been sparked by a slump in sales of Chunky Kit Kats and Aeros.

The company said yesterday the latest job cuts, which are in addition to the loss of 220 technical posts announced in August, were caused by the £150 million investment in new automated technology.

But one worker, who asked to remain anonymous, said: "People feel this is nothing to do with new technology. It's because chunky Kit Kat and Aero are not selling."

He said: "People are beginning to panic."

Another worker said morale was "non-existent", and claimed shifts were being cut back from 21 eight-hour shift patterns down to 15 - a salary dive of £26,000 to £19,000 - and weekend work and overtime had vanished.

A Nestl spokesman sought to play down the significance of Mr Jobson's warning over worker absence, saying the comments were "standard" in any business. "Every company has concerns about levels of absenteeism and every company is looking to reduce it," he said."

He confirmed shift patterns had changed and discussions about compensation clauses with unions were ongoing.

He insisted the job losses were caused by new technology and not a slump in sales, which he said were "good". He said: "We have just launched Kit Kat Kubes and they are going very well."

Mr Jobson insisted that new technology and rising competition were behind the job losses at the site, which employed about 5,500 people when Rowntree was taken over by Nestl, but now employs 3,000.

"But my key message is that we've got a great factory in York with great brands and good people," he said.

John Kirk, of the York GMB union, accepted there had been a problem with absence at the factory for the last four or five years, but denied it threatened its long-term future and said he was positive about the future.

"Levels are still at about five per cent of the workforce. In my view that figure is not really that high when you take into account long-term sickness." Mr Kirk said he was aware the company was "carrying a significant amount of stock", but said Nestl was approaching the busy Christmas period and it was hard to make an accurate assessment of demand.

Mr Kirk said the GMB would fight any compulsory redundancies.

Updated: 10:35 Thursday, November 06, 2003