Defence manufacturer General Dynamics has admitted that jobs are to go at its sites in Oakdale and Newbridge as part of a restructure.
The American-owned firm, which employs about 800 people at Oakdale and Newbridge, has said 185 jobs are being lost across the UK.
A spokesman for the company told Caerphilly Observer some redundancies would be from its South Wales operation but could not say how many.
He said: “We haven’t broken it down by site. We are looking at redundancies of up to 185 people right across our ten sites in the UK. We have only got an overall figure.”
The company has come to the end of a voluntary redundancy programme and is now looking at compulsory job losses.
The spokesman added: “I would expect a high possibility of redundancies at the Wales-based sites.”
Work at Newbridge is mainly research and development while Oakdale is the base for two programmes of work for the British Army – the Bowman tactical communications system and the Specialist Vehicle (SV) armoured vehicle.
The armoured vehicle, currently being used by the Spanish and Austrian Armies, is being redesigned and modified for the British Army by General Dynamics. It is currently at the prototype stage.
In other press reports, the company has said the defence market is challenging because the Ministry of Defence is not giving out as many contracts.
The redundancies at the Welsh sites are part of a wider global restructure announced in April.
The UK businesses of General Dynamics will work more closely with sister companies in other countries.
As part of the restructure, the company appointed Steve Rowbotham as its chief operating officer to oversee General Dynamics in the UK.
On accepting his new appointment, Mr Rowbotham said: “The United Kingdom is a priority market for General Dynamics.
“We will continue to operate from the UK, with the same footprint as we have today, to support our UK customers. We will also continue to use our UK business as a base from which we can export capability in partnership with the UK Government.”