Leader Jeremy Corbyn said it was a “very disappointing night for the Labour Party” – and he would not lead it into the next election.
Lib Dem leader Jo Swinson has lost her seat to the Scottish National Party.
The BBC is now forecasting the Tories will get a majority of 76, less than the 86 originally predicted.
Labour have lost seats in the North, Midlands and Wales in areas which backed Brexit in the 2016 referendum.
They are set to win 65 fewer seats than in 2017, it is suggested.
Speaking at his election count in Islington North, where he was re-elected with a reduced majority of 26,188, Mr Corbyn said Labour had put forward a “manifesto of hope” but “Brexit has so polarised debate it has overridden so much of normal political debate”.
He also took a swipe at “media intrusion” – and said he would not lead the party into the next election, but would stay on while a period of “reflection” takes place in the party.
Speaking after he was re-elected in Uxbridge, west London, with a slightly higher majority, Prime Minister Boris Johnson said: “It does look as though this One Nation Conservative government has been given a powerful new mandate to get Brexit done.”
Some traditional Labour constituencies, such as Darlington, Sedgefield and Workington, in the north of England, will have a Conservative MP for the first time in decades – or in the case of Bishop Auckland and Blyth Valley – for the first time since the seat was created.
But Labour took Putney, in south-west London, from the Tories.
The exit poll taken at 144 polling stations, with 22,790 interviews, has been adjusted to take actual results into account.
The BBC forecast suggests the Tories will get 363 MPs – 45 more than at the 2017 election.
With more than half of all seats declared, the latest forecast suggests Labour will get 197 seats, the SNP 53, the Lib Dems 13, Plaid Cymru four, the Greens one, and the Brexit Party none.
Conservative Home Secretary Priti Patel said the government would move quickly to “get Brexit done” before Christmas by introducing legislation in Parliament, if it is returned to power.