UPDATE 9.30pm: TOYOTA has confirmed it will cut 350 jobs from its Altona plant, blaming the strong Aussie dollar and reduced output.

Max Yasuda, the company’s Australian president, told workers of the bad news shortly after 4pm.

"It is unfortunate that we have to take this action and we will ensure affected employees are supported during this process,” he said.

"In consideration of current and anticipated market conditions this action is necessary. It is not possible to maintain our workforce at its current size.

"Toyota Australia is facing severe operating conditions resulting in unsustainable financial returns due to factors including the strong Australian currency, reduced cost competitiveness and volume decline, especially in export markets."

The Federal Government said Toyota's decision underlined the need for continued assistance to the industry.

Manufacturing Minister Kim Carr said the job cuts were an unfortunate consequence of the high dollar and global financial uncertainty.

He said he believed Toyota looked at every option open to it to avoid making skilled workers redundant.

"But the harsh reality of the continuing strong Australian dollar means that Toyota's export markets are under severe pressure and they are struggling to sell enough cars to keep the Altona line at full capacity," Senator Carr said.

"Ultimately, companies have to take tough decisions based on commercial realities to ensure that their business model remains sustainable, and that is what Toyota has done today."

He said the Government would do everything it could to help those who lost their jobs.

Rumours about job losses began circulating after the company announced an address by Mr Yasuda to all staff nationwide would take place at 4pm.

Toyota spokesman Glenn Campbell earlier would not confirm the job losses but said the annual address - which took place at the company's Altona factory - would discuss "future focus areas'' for the company.

But Charlie Marmara, senior convenor with the Australian Manufacturing Workers Union, said union delegates were told at about 3.30pm that 350 workers would be given compulsory redundancies.

"I'm gutted,'' Mr Marmara said.

"The Australian dollar costs other countries... Other countries can build a car cheaper.''

Mr Marmara said the job losses would affect manufacturing and production workers as well as management.

He said the union would now negotiate redundancy packages with Toyota.

Output at the factory has fallen dramatically over the past year as export sales of the Toyota Camry to the Middle East collapsed as a result of the global financial crisis.

Local sales also dropped during the runout of a superseded model and the switch to an all-new Camry which is just heading to showrooms, as well as the introduction of a new Camry hybrid and V6 Aurion from March.

The AMWU's Paul Difelice said earlier today that workers were preparing for the worst.

Mr Difelice called on state and federal governments to offer an assistance package to affected workers.

Coalition stands firm

However, the Federal Coalition will not reconsider its policy to wind back car industry subsidies despite job losses at Toyota, Opposition leader Tony Abbott said.

"The Coalition is very happy to make lavish assistance available to the car industry - under our proposals, there will be $1 billion in the Automotive Transformation Scheme,'' Mr Abbott said.

"I want a viable car industry for the long term in the country, but we've got to ensure that it really is viable over the longer term.

"The Coalition is prepared to invest in that viability, but we're not prepared to invest beyond the $1 billion that we say will be in that fund.''

With AAP

Originally published as Toyota axes 350 Altona workers