Iron losses in laser-cut toroidal samples of 12 mm thick steel laminations used in large synchronous motors are studied. Eddy currents in the lamination cross-section are solved with the 2-D finite element method while applying a constitutive law based on the Jiles-Atherton hysteresis model. The effect of cutting on the material properties is included by a continuous local material model approach, which enables to express the material properties as a function of distance from the cutting edge. The accuracy of the model is validated by comparing the simulations and experimental measurements of five toroidal samples assembled from concentric rings with different widths. Highly accurate results are obtained in terms of both the matching of B-H loops and the total loss values with an average relative error less than 2.9%. The results show that the hysteresis loss under quasi-static excitation increases up to 20.4% due to the effect of cutting. It is observed that the eddy-current loss becomes dominant over the hysteresis loss even at 5 Hz, and this eddy-current loss decreases up to 72.5% as the number of concentric rings increases. The presented model and the results accurately show how iron losses occur in thick materials and how they are affected by the cutting process.