The company wants to "make up to 1,200 workers redundant" at its steelworks in the northern English town of Scunthorpe, Unite said in a statement on Thursday.
The union also blasted British Steel as "greedy" -- and the UK government as "shambolic" for failing to help the stricken sector, adding it planned industrial action.
"The company has not provided a plan of what they are doing nor launched a formal consultation so we are currently in limbo," a Unite official told AFP on Friday.
British Steel, bought by Chinese giant Jingye in 2020, is Britain's second biggest steelmaker after Indian-owned titan Tata Steel UK.
The sector has been slammed in recent years by rising energy costs and the souring economic climate, as well as cheaper imports.
"Unfortunately, like many other businesses we are reluctantly having to consider cost cutting in light of the global recession and increased costs," British Steel said in a statement giving no details on layoffs.
And it blamed "significant challenges because of the economic slowdown, rising inflation and exceptionally high energy prices".
British Steel employs around 4,000 people across the country, but the redundancies are expected to fall mainly on Scunthorpe.
Business minister Nusrat Ghani criticised the timing of the announcement amid ongoing government talks with the company over a "generous package of support".
"It is peculiar for this conversation to take place while we're in the middle of good negotiations," Ghani said Thursday.
Holly Mumby-Croft, a Conservative MP who represents Scunthorpe, stated that the plan involved 800 redundancies.
"Hundreds of families in Scunthorpe are now worried sick wondering if and when they will lose their jobs," she said.
Britain's Conservative government reportedly plans to offer grants totalling 600 million pounds to help British Steel and Tata Steel UK replace dirty blast furnaces with less carbon-intensive technology.
The pair operate Britain's four remaining steel blast furnaces.
Tata had threatened last July to shut its Port Talbot plant in Wales unless it receives UK state aid to help decarbonise production.
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