De La Rue announced redundancies today as it said it was phasing out the printing of banknotes in Malta.
It said this would be replaced with a centre for excellence for Identity and Security Products.
De La Rue is the largest supplier of passports in the world. The company did not say how many people will be losing their job but the General Workers' Union said the company wanted to wold reduce workers by around 300 over two-and-a-half years.
The union said it objected to the redundancies and would work to ensure that the interests of workers and its members were safeguarded.
The GWU also said it was in contact with the authorities for the situation of the affected workers to be addressed.
Speaking during a programme on One TV in the evening, the Prime Minister said the government had been in talks with De La Rue for months working to keep the company in Malta.
It was helping the company to keep creating jobs in Malta through its new investment and the government would be helping workers who lost their job find another in the shortest possible time.
Dr Muscat noted that the news from De La Rue came on the same day that was announced that Malta had the third lowest unemployment rate in Europe. This was because the country had a strong economy that was capable of absorbing the lost jobs, he said.
Those who lost their job would not be abandoned, the Prime Minister promised.
The government said in a statement it was committed to finding an alternative job opportunity to all employees who would be adversely affected by the restructuring.
The Opposition expressed its concern at the news, which, it said, put pressure on the government to intervene and see how it could save jobs or assist workers find alternative ones. It expressed solidarity with all the workers affected.
The Labour Party said the government would be doing its utmost for alternative jobs to be found for the workers.
In a statement, the company said it proposed to relocate its current security products capability from Gateshead in the UK to Malta.
"De La Rue will consult on these proposals with the relevant unions and elected representatives. Around £15m (€21.3 million) will be invested in equipment and skills to create the centre for excellence at De La Rue’s current site in Malta. This equates to half the investment being made by De La Rue globally," it said.
The investment would further enhance the Group’s Identity and Security Products capability and give it a competitive edge to capture the high growth opportunities in these markets globally.
The centre forms part of De La Rue’s review to optimise its manufacturing footprint. The restructuring would see the company invest £30 million (€42.6 million) across the group as a whole, with associated restructuring costs of £8 million (€11.4 million) over the next two years.
"As a result of the proposed creation of the centre, and subject to consultation, the current banknote printing in Malta would be phased out. This would result in a number of redundancies and a formal consultation with the affected employees was now underway.
CEO Martin Sutherland said:
“As the leading commercial designer and printer of banknotes and passports, our manufacturing footprint review has identified significant opportunities for improvements in capability and efficiency.
"Today we are announcing plans to achieve a more focused business, in line with the future needs of our global customers, focused on centres of excellence with significant investment in our future.
"Our plant in Malta has demonstrated its capabilities in identity authentication which is why we have selected it as a centre for excellence. We look forward to working with the team in Malta to grow the business in an increasingly important market.”