Fiat SpA (F.MI) supplier Oerlikon-Graziano plans to lay off half of its staff working in eight Italian plants due to the sharp auto sector downturn, labor union Fim Cisl said Thursday.

In a statement, the union said that Oerlikon-Graziono announced plans to lay off 1,370 workers out of 2,700 staff at a meeting held at the Italian industry ministry Thursday.

The job cuts would be "unacceptable," the union said, adding that talks on the matter should be held with the Italian government in the coming weeks.

-By Luca Di Leo, Dow Jones Newswires; +39 06 6976 6921; luca.dileo@dowjones.com