The NHS regulator has downgraded two hospitals in Leeds to "inadequate" from "good" following an inspection.
The Care Quality Commission (CQC) said the maternity and neonatal services at Leeds General Infirmary (LGI) and St James' University Hospital of the Leeds Teaching Hospitals (LTH) NHS Trust posed "a significant risk" to women and babies.
The regulator has now issued a warning notice that requires the trust to take immediate action to improve.
CQC conducted inspections in December and January, following concerns from staff, patients and families about safety and staffing levels at the two hospitals.
The inspectors found poor hygiene standards in the maternity wards of both hospitals, unsafe storage of medicines, and short-staffed units.
The neonatal wards were also understaffed and infants needing special care were being transported unsafely from one hospital to another.
The BBC had reported in January that deaths of at least 56 babies and two mothers in the two hospitals over the past five years may have been prevented.
The broadcaster had obtained data from the LTH trust showing potentially preventable baby deaths through a Freedom of Information request.
There were 56 cases from January 2019 to July 2024, made up of 27 stillbirths and 29 neonatal deaths.
LTH chief executive Prof Phil Wood said his priority "is to make sure we urgently take action to deliver these improvements."