Scunthorpe’s TSC Foods looks set to cut nearly half of its workforce following a 75 per cent decline in business.
Up to 200 jobs are at risk, with the company blaming the coronavirus outbreak for a slump in demand.
Specialising in chilled soups and sauces, it boasts a supermarket brand in Glorious!, but a major part of its business is supplying to restaurants, pubs and catering - trades in most cases stopped overnight by lockdown.
Significant numbers of employees were already furloughed due to the Covid-19 crisis.
TSC Foods, formerly The Sauce Company, is owned by The Billington Group, and employs around 450 people at its facilities on Arkwright Way.
The company said it has worked closely with its partners and customers to protect employees, but the steep decline in production has forced it to protect the business’s future.
Unseasonably warm weather throughout the crisis may also have dented retail soup sales.
TSC managing director, Ray Pigg, said the company had tried to weather the coronavirus storm but said the company was taking action to protect its long term future.
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Mr Pigg said: “We’re all aware of the challenges the events of the last three months have posed for businesses in many sectors. Long-term closures and regulatory changes, though necessary and important for public safety, have had a significant impact on the food service industry.
“The new operational restrictions placed on our customers mean they require much less from us as they start to emerge from this scenario, which in turn, impacts our forecast significantly.
“With this in mind, we have conducted a considered and in-depth review of our market position and it is clear that to protect the future of the business, we must operate from a lower cost base.
“Unfortunately, this means we must start the consultation process for up to 200 redundancies, set to impact all areas of TSC.
“I understand that this is disappointing and upsetting for many of the wonderful people inside our business.
“We will be communicating with our employees immediately on next steps and we’re committed to complete transparency to minimise the impact, wherever possible, on those affected.”