Around 60 jobs could be axed at John Smedley mill.
The factory, which employs more than 400 people, launched a 30 day consultation period last week.
Workers and union representatives met with bosses yesterday – after the company announced that due to worsening trading conditions and a difficult economic situation, they could be forced to make 60 full time redundancies.
This could see 40 jobs go at the Lea Bridge site and a further 20 lost at the Clay Cross factory.
A spokesman for trade union Community, which is representing the workforce, said: “The company wants to invoke a clause allowing short time working in an effort to avoid job losses.
“All due, they say, to deterioration in trading conditions.”
The factory is discussing flexible working practices, reducing working hours, voluntary and compulsory redundancy.
Bosses anticipate that redundancies could be made across various departments.
Ian Maclean, managing director, said: “John Smedley Limited has survived as an independent, family owned, company for over 225 years through many challenging periods of economic uncertainty.
“Today, we find ourselves trading in the most difficult economic conditions in the last 40 years.
“Our intention is to face these challenges positively and do everything we can to protect the future of our company, on which so many jobs depend.
“I am confident that our restructuring proposals, which we will discuss fully with our employees, will ultimately make us a stronger business for the future.”
After the consultation period the firm will be meeting with each employee whose job may be at risk.
Sean Redgate of union Community, said 36 manual workers were set to made redundant at Lea and four office staff.
He said: “I have spoken to branch officials and they say orders have dropped. The company has looked at other ways to save money but the fact is the financial situation means there is going to be job losses.
“We have been assured this is going to be a one-off hit.”
John Smedley Limited is the oldest manufacturing factory in the world.
It has been manufacturing the finest knitwear from cotton and merino wool since 1784, in Lea.
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