Belron, which employs 3,000 staff in the UK, told staff that mild conditions over some of the winter and higher fuel prices meant people were driving more slowly and shorter distances.
The warmer conditions and a more careful approach to driving has caused less vehicle glass damage and has reduced the size of the wider market by 11 per cent, Autoglass told its staff.
The move came as latest figures from the AA showed the average cost of petrol hitting 136.07p a litre, with diesel at 139.77p a litre.
The state of the market reflects the increasing pressure that household incomes in the UK are coming under as the cost of living soars and wage growth stalls.
Belron has entered a 30-day consultation process over plans to make 300 permanent staff and 100 temporary employees redundant.
The firm has than 1.5 million customers a year and runs 101 branches across the UK.