The rumors had been around for days but nobody knew for sure until next week's work schedule was posted and 1,250 names were missing.

With that blunt message, Bethlehem Steel, Maryland's largest private employer, today began its largest cutbacks since the recession of the mid 1970s.

Officials at the sprawling steel mill east of Baltimore minimized the layoffs and said they hoped that 1,100 of the workers could be recalled within a week or two. But the layoffs followed public statements by a vice president in Bethlehem's Pennsylvania headquarters that the steel company -- the nation's second largest -- has faced a serious drop in orders over the last five weeks and will have to continue cutting back operations until business picks up.

To the union leaders who represent Beth Steel's 18,500 workers and to local businessmen in this industrial suburb, the layoffs were proff enough that a recession has arrived.

In the past few months, 650 workers have lost their jobs because of declining sales.Union officials said they expected further layoffs in the coming months.

"We have 6,000 people in our local," said David Wilson, president of one of the two affected unions in the United Steelworkers of America, "and we expect nearly half to be laid off in a month or two. President Carter is not only slowing the economy down, he's stopping it and hasn't figured out how to crank it up again."

Although Bethlehem has laid off workers for periods of days of a week or two in the past, union officials said those layoffs never occurred in the spring, normally a boom time for the steel industry. They also said that the plant has never closed down an entire section before and, since the 1974 recession, has not laid off such a large number of steelworkers at one time.

A spokesman for Bethlehem Steel said the layoffs were due to "production adjustments" in the finishing mill operations.

The spokesman said that one entire division of the plant that makes steel plates for construction, bridges, ships and other industries, as well as several other steel mill operations, will be shut down for at least one week, affecting 1,250 employes. Of that number 1,100 have lost their jobs temporarily, the spokesman said, and the remaining 150 will be out of work indefinitely.

Decisions of bringing the workers back to their jobs at the mill will be made "on a week-to-week basis based on production demand," the spokesman said. "We just don't want to predict what the economy is going to do or what our order rate is going to be."

While union officials spent the day answering questions about unemployment benefits, storekeepers, whose customers work, eat and sleep in the shadow of Bethlehem's mammoth smoke stacks and blackened mill houses and shipyards, worried about their businesses. And hundreds of families in the neat rowhouse neighborhoods where making steel is a way of life, anxiously took stock of their resources.

"We're a steel town and people have settled here to work in the steel mills," said Pat Winter at the Dundalk Chamber of Commerce. "I think it's fair to say that what happens to Bethlehem Steel happens to Dundalk. If Bethlehem Steel went, Dundalk would go."

At Santoni's Market, in the center of old Dundalk, owner Robert Santoni said that a large number of his customers cash Bethlehem paychecks each week before doing their shopping at his store. "Many people grew up near Dundalk or Sparrow Point, and everyone, and their mother worked for Bethlehem Steel.

"If this goes on more than a few weeks," he said "everyone will tighten their belts, even -- the ones -- who still have jobs, for fear that they'll lose their jobs, too. People do have to eat but they'll spend less and we'll have to cut back, too. The last recession has affected us very deeply."

Not far from Bethlehem's complex, which boasts its own roads, baseball diamond, hospital, and police force, lives Roy Shepherd, who has worked for Bethlehem for the last 23 years.

Today his name vanished from the weekly work schedule that company officials post each Thursday, and Shephered faced the prospect of an indefinite economic future. "If it lasts much longer than a week," said Shepherd's wife Karen, "the uncertainty will kill you."

A few blocks away, near the entrance to plant's gate where a sign proudly proclaims, "Welcome to Hot Strip Mills", is a strip of bars where steel workers frequently finish their day.

In one of these establishments, the Friendly Tavern, Brenda Mundy quietly wiped down the 30-foot bar and wondered aloud about the effect of the layoffs on her father, who has spent 20 years working at Bethlehem.

"My father was certain he was going to be laid off. After spending 20 years, it's unfair," she said.

Inside the company gates, a worker stood in front of rows of empty railroad tracks and simply shook his head when he learned of the layoffs. "What am I going to do?" he said. "I'm going to go home and cry the blues."