UPDATE 1-Suzuki to lay off 1,200 workers in Hungary

(Updates with company comment, new targets)

BUDAPEST, Nov 28 (Reuters) - Japan's Suzuki Motor Corp (7269.T) plans to lay off around 1,200 of its 5,523 workers at its Hungarian unit on a sharp drop in orders, the company said on Friday.

Suzuki, one of Hungary's biggest exporters, lowered its 2008 production forecast to 282,000 units from an earlier target of 300,000 and expects to produce 210,000 cars next year, spokeswoman Viktoria Ruska told Reuters.

"We are facing a drastic drop in orders and needed to adjust our production schedule as a result," Ruska said.

The firm, which exports 90 percent of its production, mostly to Europe, will complete the layoffs by February after the necessary negotiations with unions and labour interest groups.

Taiwan's Foxconn (2038.HK), another major manufacturing firm in the country, announced on Friday that it would lay off 1,500 workers, more than half of its workforce.

Hungary's economy is expected to slide into recession next year on falling export demand and a drop in domestic consumption, and the government estimates its economy could contract for up to a year and a half.

Several dozen firms have already announced large-scale layoffs and analysts estimate that the country's 7.7 percent unemployment rate in the August-October period may climb to over 10 percent by the middle of next year. (Reporting by Gergely Szakacs; Editing by Greg Mahlich and Mike Nesbit)