Nelson mayor Kerry Marshall said yesterday's announcement that Sealord is considering cutting more than 300 jobs at its Nelson mussel factory was a major blow to the region's economy.
Workers at the factory were told total staff numbers at the Beatty Street site would be reduced from 380 to 57, under a proposal to cease production of half shell mussels.
The company said producing half shell mussels was not competitive and it wanted to focus on producing high quality mussels without shells.
Mr Marshall said Nelson City Council would talk to Sealord to see how it could help the affected workers.
"Our economy is not a wealthy economy. It will have a major impact, certainly, on individuals and families, and that will percolate through," he tol The Press.
Sealord chief executive Graham Stuart yesterday said a consultation process had begun and was expected to take several weeks.
The plant had been making losses for some time, he said.
The company had done extensive research into the market for mussels without shells and Mr Stuart said he believed there were strong markets in Asia and Europe for the company to grow.
If the change goes ahead, 60 permanent and 90 temporary positions at the company's fish processing plant, also in Nelson, would be made available to affected workers.
That would still leave a shortfall of 173 jobs.
Staff had been given the next two shifts off after yesterday's announcement, and would return to work tonight.
Mr Stuart said the company was "open minded" going into consultation.
"But we wouldn't drop a bombshell like this on our staff without doing our homework," he said.
"We are open minded but we think we've talked over all the options.
"We think the proposal is robust."