Troubled hi-tech giant Pace Micro Technology today warned it could be forced to cut more jobs.

The Saltaire firm, which makes TV set-top boxes, made the announcement after yet another warning to the City that its profits will be lower than expected because of poor sales abroad.

It is the fifth such warning this year from Pace and follows job cuts at the Saltaire base in the summer.

Bosses at Pace called the entire workforce to presentations in which executives laid bare the problems the firm faced.

Andrew Wallace, Pace's marketing director, said today: "We have been talking to the staff a lot. We want to bring everyone up to speed with what's happening, but the staff here do recognise what we have been through."

The firm has been troubled by problems in the UK digital TV market, but Mr Wallace said the latest problem had been caused by poor foreign sales of its TV equipment.

He would not be drawn on how many job losses were likely, but said it had no plans to pull out of Saltaire.

Job cuts were something the firm had to face up to, he said.

"We've managed to save a lot of money through non-staff expenditure, but it is difficult to say how much more we can save as this is, after all, a people business."

Pace employs about 800 staff, with around a quarter working in its operations in France and the US. Around 600 workers are based at Saltaire.

It has shed 180 jobs in Saltaire this year to save £15 million and admitted "further actions" were needed to cut costs as revenue fell.

Mr Wallace added: "The staff have been through a very tough time this summer with the restructuring, they know we want to be profitable do appreciate what's going on."

Workers were upbeat despite the news.

One engineer, who declined to be named, said: "The management seemed quite positive about it when they spoke to us, saying that the drop was due to losses up to November being bigger than expected. But they feel that business will pick up in the US and Europe and it is already strong in the UK."

Another engineer said: "They said they would have to cut costs somehow but have not mentioned job losses.

"At the moment, we feel quite secure about our jobs and feel quite optimistic. Nobody seems too worried about it."

A technician added: "We are bound to be a bit worried when told about something like this, but we have to wait and see."

Pace said losses in the six months ending November 30 would be "greater than anticipated", but would not give details of how it would achieve cost cuts.

Pace has already warned shareholders that a revised contract with Rupert Murdoch's TV giant BskyB to provide set-top boxes will see £8m fall off its profits for 2002/3. The boxes are being sold to BskyB at below cost price.

"Normally the business would be profitable enough to cover such losses but the US and European markets have not been profitable enough to do this," Mr Wallace said.

But Mr Wallace said Pace was not the only hi-tech firm suffering: "Of our top ten competitors only two are making money.

"We think we've put plans in place to ensure Pace has a future, we want to use the 450 plus engineers here, in the US and in France to innovate new technology."

The firm, which was badly hit by the uncertainties in the market caused by the collapse of ITV Digital, hopes the new digital TV service, Freeview, will boost its finances.

Pace shares rose by just a few pence today, opening at 19.41p. Its profits for the year ending June were 70 per cent down on the previous year at £13.1 million.