Mataura Taskforce chairwoman Laurel Turnbull said residents were gradually accepting the fact sheep and lamb processing in the town would stop.
"Obviously, people are still upset. We have only the basics here now ... We will struggle to attract people to town. But we still have some of the cheapest housing in the country."
The task force had been working on stimulating economic and social growth in the town, but the proposal would set those plans back, she said.
"Mataura is a very resilient town. We can get through this."
Two weeks ago Alliance announced a proposal to move its sheep-processing facility from Mataura, near Gore, to the company's plant in Lorneville, near Invercargill.
Alliance will offer 260 sheep meat workers the opportunity to shift to Lorneville, but the future of 65 management staff, supervisors, engineers and administrators is less certain.
Beef processing at Mataura is not affected by the proposal.
Alliance is halfway through a month-long consultation process with workers and their unions but under the proposal, sheep and lamb processing would stop from November.
New Zealand Meatworkers and Related Trades Union Otago-Southland branch secretary Gary Davis said discussions with Alliance were progressing "OK". The union met the company on Wednesday and was due to to meet it again today.
"Everybody is sitting in limbo at the moment," Mr Davis said.
Workers had questions about possible transfers to Lorneville, including working hours, transport to and from the plant and other concerns.
The union hoped to meet workers again next week.
Gore Mayor Tracy Hicks said the Gore District Council was in the early stages of developing a project to help workers who had lost their jobs. The project would involve a community development worker, based in Mataura.
"One of the challenges is that these losses will affect the whole district, not just Mataura. We won't know exactly what this means for us until the consultation period is over."
Mr Hicks said he hoped to be able to release details about the project next week, after plans had been developed.
