RHI has announced that it is closing the main production line at its factory in Bonnybridge, which employs 90 staff.
The company, which manufactures parts for the steel industry, said that it hopes to transfer some employees to its facility in Clydebank.
However it is understood that around 40 jobs will be lost as a result of the decision to downsize.
RHI currently employs 120 staff at its High Bonnybridge site.
The announcement was made to shocked workers on Tuesday. A four week consultation period with those affected has began.
In a statement, RHI said: “Confronted with an unfavourable market environment in Europe: uncertain macroeconomic conditions, low economic growth rates as well as overcapacities and reduced demand in its main customer markets, especially the steel industry, create a severe competitive situation within the refractory industry.
“As a result, the Scottish plant in Bonnybridge, focused on technical refractory products for the steel industry, is running with very low demand therefore RHI has taken the decision to close a specialised production line at Bonnybridge plant.
“The plant in Bonnybridge currently employs around 120 people, around 90 working at the production line to be shut down. RHI offers Bonnybridge employees job opportunities at the nearby RHI Clydebank plant.
“Consultations with Trade Unions and employee representatives start immediately and RHI is fully committed to a fair and social process.”
The factory in Hillview Road will retain some facilities.