BAE Systems Plc said it may be forced to dismiss more than 3,500 employees in its U.S. shipbuilding business as Pentagon spending cuts threaten maintenance work on navy vessels.

Four locations and about 70 percent of U.S. staff involved in ship repair work may be affected, the London-based company said in an emailed statement. Facilities in Norfolk, Virginia and San Diego, California would be hit most severely, with cuts also possible in Hawaii and Mayport, Florida, BAE said.