UPDATE 1-Castings cuts a third of workforce, warns more to come

* Cuts 350 jobs to combat low demand, production

* Operating at 40 pct production levels

* Forecasts difficult year to March 2010

* Shares down 9 pct (Adds details, share movement)

Feb 12 (Reuters) - British iron castings supplier Castings Plc (CGS.L) said on Thursday it slashed one-third of its workforce to combat low demand and production and warned of further job cuts, sending its shares down 9 percent.

The company, which cut about 350 jobs, said customer demands have been at a very low level especially over the Christmas and January period.

Castings expects jobcuts to continue further unless there is an improvement in trading conditions.

The company is currently operating at about 40 percent of its previous production levels and expects no improvement at the present time.

Castings said it expects to sustain operations at reduced levels, but sees a "very difficult" year to March 2010 on current sales levels and customer demands.

Shares of the company were down 13 pence at 131 pence on the London Stock Exchange at 1017 GMT. (Reporting by Balachander Surianarayanan in Bangalore; Editing by Kavita Chandran)