* BAE starts consultation process
* Cuts to come because of workload changes
* Shares down 1 percent
(Adds detail)
LONDON, Sept 9 (Reuters) - BAE Systems plans to shed 740 jobs in its military aerospace business in Britain, it announced on Thursday, ahead of the government's defence spending review.
"We have made an announcement within our UK Military Air Solutions business this morning which relates to the beginning of a consultation process around a proposed 740 job losses from five of our UK sites," a BAE spokeswoman said on Thursday.
Europe's largest defence contractor said the cuts come as a result of workload changes and will enable it to maintain a lean and efficient business in the future. "A programme of rationalisation and efficiencies remains ongoing," BAE said.
The Unite union said the cuts would be made across BAE's military aircraft sites at Brough, Chadderton, Farnborough, Samlesbury and Warton.
The union said a further 206 jobs would go at BAE's Systems Integrated System Technologies (Insyte) unit.
However, BAE said proposed cuts at Insyte were announced last November and the consultation process surrounding those job losses would continue.
Its shares, which have fallen 10 percent this year, were down 1.6 percent at 318.2 pence by 1045 GMT, valuing the company at around 11 billion pounds ($17 billion).
Britain is reviewing its defence budget as part of a broader move to cut a record peacetime budget deficit, details of which will be unveiled on Oct. 20.
Analysts believe a review of defence needs will lead to cuts of up to 15 percent in the defence budget -- 36.9 billion pounds for the current financial year -- with big procurement programmes set to be scaled back.
"With the forthcoming defence review these cuts may be the tip of the iceberg but knee-jerk reactions from employers could make things even worse," Hugh Scullion, the general secretary of the Confederation of Shipbuilding and Engineering Unions said.
"Cuts are being demanded before the shape of the defence industry has been decided. The defence industry will suffer more than necessary, if employers make poor judgment calls." ($1=0.6463 pounds) (Reporting by Rhys Jones; Editing by Greg Mahlich)