Vic ship builder sheds 99 jobs

Close to 100 workers will clock off for the last time at Melbourne shipbuilder BAE Systems on Tuesday.

The company, which is has seen its defence contracts dry up, announced last month it would cut its Williamstown workforce by 125 during September and October.

Australian Manufacturing Workers Union assistant secretary Glenn Thompson said it was a distressing day for the 99 sacked workers.

About 500 are still employed at the shipyard.

Mr Thompson said BAE Systems had cut at least 500 jobs in 18 months.

He warned the shipyard would eventually be mothballed unless it got a new defence contract.

Victorian Industry Minister Lily D'Ambrosio said the Abbott government could have prevented the losses by handing BAE Systems a contract for the navy's new offshore patrol vessels.

"They haven't lost their jobs because they're not highly skilled," Ms D'Ambrosio said.

"They have lost their jobs because Tony Abbott has let them down."

The Abbott government in August announced construction of next-generation frigates and patrol vessels would be brought forward, but there was no guarantee for shipyards outside of South Australia.