THE Welsh Government has pledged to work with Tata to set up a task force to find out what can be done to help those affected.
It said the announcement was very disappointing news and a massive blow to those affected.
A spokesman said: “The Welsh Government has a very strong relationship with the company and officials will now work with Tata to establish a task force and identify what support we can provide for those affected.
“Tata’s decision reflects the serious and ongoing challenges faced by manufacturing industries during these very difficult economic times.
“In addition to these challenges, it is clear that high energy costs and uncertainty over UK Government energy policy are having a significant impact on business investment decisions.
“As a Government, we have warned for some time of the need for these costs to be reduced.
“Despite today’s news , Tata’s commitment to re-light Blast Furnace No 4 at Port Talbot and restart the hot mill at Llanwern illustrates the company’s continued belief in its Welsh workforce.”
Secretary of State for Wales David Jones said: “There is no denying the challenging conditions businesses are facing in the global marketplace.
“The announcement by Tata Steel will impact on many in South Wales, but while it will not give the individuals affected comfort, this commercial decision is one that has been undertaken to ensure Tata’s UK operations can remain competitive.
“I have been assured that Tata remains committed to having a strong presence in Wales and the UK as a whole.
“The news that Tata is expected to light Blast Furnace 4 in the first quarter of 2013 is welcome news.
“However, the loss of more than 500 jobs in Wales is a short and sharp reminder of the challenges facing businesses globally.
“Both Governments in Whitehall and Cardiff need to be relentlessly focused on the economy and I am committed to working with the Welsh Government to ensure we succeed in this area.”
Mr Jones said he would be seeking an early meeting with Tata officials.