London's Diamond Aircraft has grounded its D-JET program and issued lay-off notices to a significant number of its employees.

In a cost cutting move, the aircraft company announced on Monday the majority of its workforce in London has been issued temporary lay-off notices as part of a restructuring.

"We want to hire back as many employees as possible, as quickly as possible, but the exact number and timing will be determined as we develop our restructuring plans in the coming weeks," said Peter Maurer, President & CEO.

"Regrettably we need to suspend activity on the D-JET Program, pending the securing of additional funding."

Officials cite slumping sales of its piston aircraft, and the 'significant burden' of its cost intensive D-JET development program.

In a media release, Diamond said it's retaining a core group of employees to fulfill purchase orders for aircraft, parts and services and to continue providing technical support.

The exact number of layoffs wasn't included in the release, however sources have told AM980 the decision will impact approximately 200 employees. 

"Of course everybody is distraught by a situation like this, but i'm very proud of the workforce we have," said Maurer.

Diamond Aircraft was thrust into the national spotlight during the 2011 federal election after the company said 213 jobs would be lost if a $35 million federal loan didn't come through. 

The issue became a focal point during the election campaign when Mayor Joe Fontana and some federal Liberals toured the plant to pressure the Conservatives to approve the loan.

Over a year ago, Diamond announced it had entered into an agreement to secure funding for the D-JET program, but that failed to materialize.

Maurer confirms they're in talks with different parties and he's hopeful a funding agreement can be reached in the near future.

Maurer adds he knows time is of the essence because competing companies will likely be lining up to poach workers.

"Quite frankly that's my biggest concern," he said.  "The longer this goes on the higher the rate of loss of employees will be."

Monday's announcement was limited to Diamond's Canadian based operations only.