German shipbuilder Lurssen has suspended production of Saudi Arabian coastguard vessels in the uncertainty surrounding the murder of journalist Jamal Kashoggi.
The company is unclear whether the German government will grant export licences after the dissident was murdered in the Saudi consulate in Turkey, Reuters reported.
The yard has placed large numbers of staff on short hours as a result.
German chancellor Angela Merkel said it would authorise no further weapons exports until Saudi Arabia had satisfactorily explained his death.
Lurssen won the deal five years ago for patrol vessels.
Construction began at its Peene Shipyard in 2016.
"Suspending construction and cutting working hours as a direct consequence is a heavy blow to us," said shipyard official Harald Jaekel in a statement.
Almost all of Peene's 300 workers would be affected, the statement said.
The uncertainty made production planning impossible, the company added.
