Adelaide-based shipbuilder ASC has announced 130 trade jobs will be cut from its Air Warfare Destroyer (AWD) project by the end of next month.

Workers were notified about the cuts today.

The shipbuilder flagged during a Senate estimates hearing last year that jobs would be slashed as work slowed on the AWD project.

ASC said about 45 trade positions and 85 contract and other positions across the welding, painting, pipework, electricians and operator trade groups would go.

Work on the AWD peaked in April 2015 and the workforce has been reducing since then.

The company said it was pursuing future shipbuilding opportunities in the offshore patrol vessel and future frigate projects, starting in 2018 and 2020 respectively.

"The current job reduction activity will have no impact to ASC's submarine workforce or planning for the future submarine project," the statement said.

South Australia's unemployment rate is the highest in the country with 7 per cent recorded by the Australian Bureau of Statics in November.

The Federal Government announced last year a $50 billion Future Submarine fleet and that the submarines would be built at the Osborne shipyards.

Australia's costly shipbuilding policies breaking hearts

South Australian Senator Nick Xenophon described the job cuts as "nothing short of an avoidable disgrace".

"These shipbuilding jobs should not have been lost if the Federal Government had a plan to deal with shipbuilding to have continuous shipbuilding as recommended by both Defence and the RAND Corporation," Senator Xenophon said.

He said the Federal Government was spending almost a billion dollars on building supply ships in Spain and $500 million on an Antarctic ice breaker to be built in Romania.

"Those jobs should have been here in SA where we have the shipbuilding expertise," he said.

"The problem with a stop-start inconsistent nature of shipbuilding because of Government policy in this country is that it actually not only costs jobs, breaks people's hearts, but it ends up costing taxpayers billions of dollars more."

State Defence Industries Minister Martin Hamilton-Smith said the cuts showed the Federal Government needed to get moving on future promised projects.

"There has been no confirmation of when and how the Commonwealth Government intend to progress the frigate and submarine projects," Mr Hamilton-Smith said.