Pace Microtechnology has announced the closure of its manufacturing plant in Saltaire with the loss of 470 jobs.

The huge blow to Bradford's economy came as a shock to workers. It will see the company's manufacturing side move completely overseas with the restructuring expected to cost £4.5 million.

Pace's marketing manager Andrew Wallace said the move was to ensure the company, Europe's leading producer of digital set top boxes, remained competitive and met market expectations.

The boxes are used to enable viewers to access satellite and cable tv programmes.

The jobs will not go until August 17 with the plant closing down at the end of that month and the company is working with employees' leaders to work out compensation packages.

It is understood the workers were sent home early today after hearing the shocking news.

But the City was initially unimpressed, with its share price falling 14p on the day to 505p.

Mr Wallace said: "The consultation started today and we are looking for ways to help the workers and at what compensation can be achieved.

"We already outsource 70 per cent of our manufacturing and we are proposing to outsource the remainder.

"We have trained workers at the plant and may of them have NVQ qualifications. I'm sure it is something that over time will be absorbed.

"Many of these workers have got some skills and we will help them."

The company has sites in a number of countries including China and Mexico and Mr Wallace added: "We are competing with companies that manufacture in these places.

"Pace is the biggest producer of set top boxes in the Europe and about number four in the world. Lots of our competitors are manufacturing in cheaper places and we have to do that to remain competitive."

The company has taken on 110 new software engineers in the last year and Mr Wallace said it planned to add another 80 in the coming year.

Pace today also announced it is on course to meet market expectations in the next set of results, due out in July, which Mr Wallace said was "unusual" in the current economic climate and partly possible because of cost cutting.

Shipley MP Chris Leslie, who lives in Saltaire, said: "It's obviously very regrettable and I feel really bad on behalf of all the employees that might be affected.

"But there are still consultations and I want to meet the chief executive and management to try to find out if we can do anything to reduce the number of people affected.

"I'm going to do everything I possibly can to ensure the impact is minimised as much as possible by making sure we can get new jobs for as many people as we can.''