Silver Fern chief executive Keith Cooper said operations would be scaled back, and the company would lease a smaller area within the Dukes Rd site.
This move would "broadly" reduce the number of staff taken on next season by about 50, he said, when contacted.
The job losses at Silver Fern, formerly PPCS, bring the total jobs lost in the Dunedin and Mosgiel district to almost 700 since mid-April, following plans for the closure of Silverstream neighbour Fisher and Paykel Appliances announced in mid-April, Tamahine Knitwear closing its plant, the Burnside venison plant shutting and about 20 redundancies at Scott Technology.
The Silverstream plant is believed to have been sold for more than $10 million.
About 18 months ago, 500 workers worked at the Silverstream site at the peak of the season, compared with about 300 now.
Workers, many of them fearing the worst, were told of the changes at a closed-door meeting at the plant at 3pm yesterday.
Some staff spoken to by the Otago Daily Times said they became aware the plant would be sold only after reading about the meeting in yesterday's ODT.
Scales Corp chief executive Andy Borland declined to confirm the sale price, saying the plant's coolstores were a key consideration of the purchase as Scales-owned PolarCold Stores would operate the coolstores on site.
He said, when contacted, empty buildings on site would be offered for lease as an "industrial park", with an undisclosed amount of financial "reinvestment" in some of the buildings.
Silver Fern's South Island operations manager Wayne Shaw said, in a confidential handout to staff yesterday, southern dairy conversions were expected to continue having a negative impact on lamb kill and yesterday's proposal was "born from compounding factors that are largely out of our control".
Mr Cooper said he expected the number of lambs for slaughter next year would be down three million.
Silver Fern posted a pre-tax loss for the year to August of $40.3 million, but turned a a profit for the first half of the current financial year and cut its debt by $63 million.
Under its "Right Size" business consolidation project, Silver Fern has recently closed deer processing plants at Burnside, in Dunedin, and in Waikato, its Balclutha lambskin processing plant and a Hawkes Bay sheep plant, with a total loss of more than 700 jobs.
New Zealand Meat Workers Union Otago president Daryl Carran said he understood job losses at Silverstream would be through "natural attrition", and would not require redundancies.
He was disappointed, but knew Silver Fern, to some degree, needed Silverstream to process lamb carcasses from Finegand and Pareora meat works.
"This will give the workers at least some confidence, for a while, in the plant's future," he said, when contacted.
Separate lamb rack and chop cutting rooms would be repositioned to work alongside the existing boning line, with day and night shifts of 115 staff each.
Negotiations were yet to begin with Silver Fern on several issues, including staff disadvantaged by shift changes, seniority rights, impact on wages and staff moving to the PolarCold payroll, Mr Carran said.
Mr Cooper said while no Silver Fern South Island plants had been closed, the number of killing chains in operation was down three compared with four years ago.
"That [chain loss] is not so transparent or obvious as a plant closure," he said.
Silver Fern's "Right Size" project was still less than 80% of the way through, Mr Cooper said, but he declined to give details about any other plant rationalisation, saying only "no decisions have been made".
Following staff input, a final decision on Silverstream operations is due to be released on July 29.
The neighbouring 16.5ha Fisher and Paykel Appliances site, with a rateable value of $23 million, was put up for sale a fortnight ago.
Silverstream Plant
• March 1994: Fortex collapses, plant closes; sold to PPCS (now Silver Fern Farms).
• May 2008: PPCS closes Burnside venison plant; 138 jobs lost; 58ha site for tender.
• June 2008: SFF sells UK lamb-cut plant.
• July 2, 2008: SFF sells and leases back Dunedin head office.
• July 17, 2008: SFF sells and leases back Silverstream plant; 50 jobs lost.
