JUST days after the Queen's visit to his Malmesbury factory, James Dyson has shed 118 of his 282 temporary workforce, blaming the cuts on the strength of the pound.

The jobs are going on the production line and in the moulding factory at the plant, in Tetbury Hill, Malmesbury.

The news of cutbacks at Dyson comes six weeks after Malmesbury's other major employer, Lucent Technologies, announced that it is to close its factory in Swindon Road and relocate to Swindon as part of a project to cut 500 jobs nationwide.

Dyson spokesman, Victoria Savill, said the temporary employees had been employed at Dyson for one month or more and were working flexible shifts.

The temporary workers are employed through a worldwide agency, with branches across the country, including Swindon and Bristol.

She said sales of Dyson vacuum cleaners and washing machines remain strong in Europe, despite the effect the pound has had on export sales.

"Like any business, Dyson uses temporary workers to give us flexibility," said Ms Savill. "Demand fluctuates and to be a competitive manufacturer we have to react to market conditions."

Mike Williams, the chief executive of the Wessex Association of Chambers of Commerce, said companies in the manufacturing sector had experienced a slow-down in trade over the past two years.

Avon Automotive in Trowbridge, part of Avon Rubber, has revealed it is not likely to renew its lease after 2003 and has started a 90 day consulation exercise with its employees.

Avon Automotive, known locally as Avon Hose, manufactures hoses for cars, and operations could be transferred to the company's factories abroad.

The strong pound is also thought to have contributed to the likelihood of moving production Avon Rubber's depot at Bower Hill, in Melksham, is also likely to go, costing 12 jobs.

Mr Williams said: "At Dyson, there is another example of a manufacturing company cutting back on staff, albeit temporary staff, and it will be very difficult for those employees, particularly at this time of year."

He said: "We are not in a recession, and there has been a growth in the retail and service sectors.

"Total sales in the sales sector are up between eight and ten per cent on last year and house prices are up by between ten and 11 per cent," said Mr Williams.

Ms Savill said investment has been made in the mould shop at the factory and to two new vacuum cleaner production lines to make production more efficient.

She said Dyson would continue to employ temporary workers when needed.

She added that all cylinder production would move to Dyson's manufacturing facility in Malaysia, where vacuum cleaners have been manufactured for Australia and the Far East for more than a year.

Ms Savill said the cutbacks were not related to the expansion of activities in Malaysia. "Nearly 60 per cent of all vacuum cleaners bought in the UK are uprights and we continue to produce thousands of machines every day in Malmesbury," she said.

She added that some of the employees have moved to jobs on the washing machine production line and in the post room.

Last November, Dyson built a new production facility for its Contrarotator washing machine.

Ms Savill also pointed out that Dyson has made a long term investment in its mould shop, and has increased the number of moulding presses from 20 to 36.