Executive chairman Brian van Rooyen said the move was necessary to ensure the company’s viability in the face of economic difficulties facing manufacturing in Australia.

The company will seek voluntary redundancies, with 20 workers to go by Christmas.

National secretary with the Textile, Clothing and Footwear Union Michele O’Neil said the announcement was a “devastating blow for those workers and their families.”

“To have it so close to Christmas ... is going to have a harsh impact on those workers.”

A company spokesman said the spinning operation would shut, leaving dying, finishing, distribution and warehousing.

Mr van Rooyen said Australian Country Spinners continued to face a range of issues that impacted on the business including the continued contraction of the textile, clothing and footwear industry in Australia, competition from cheap imports, the impacts of global financial uncertainties, including weak consumer confidence, and the effect of exchange rate movements on exported goods.

“So, while the decision to restructure, and further reduce our workforce was a very difficult one, it was absolutely necessary if we are to ensure that Australian Country Spinners and its remaining employees have a sustainable and viable future.”

In 2008, 33 workers were axed from the factory, followed by a further 24 in 2009.

The workforce now stands at about 115, the company spokesman said.

He said if there was insufficient volunteers, the company would have to decide who will go.

Job service providers were at the factory yesterday and union officials will visit next week.

Member for Indi Sophie Mirabella said the cuts were a bitter blow to the community.

She said it was a reminder of the crisis facing Australia’s manufacturing industry.

“This is a stark reminder of the dire situation that the manufacturing sector faces and we are certainly not immune in Wangaratta,” Mrs Mirabella said.

She will meet with management in coming weeks.