Around 60 jobs could be axed at John Smedley mill in Lea Bridge.
The factory, which employs more than 400 people, has launched a 30 day consultation period.
Workers have been told due to worsening trading conditions and a difficult economic situation, the company make be forced to make 60 full time redundancies.
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.”
The factory is set to discuss flexible working practices, reducing working hours, voluntary and compulsory redundancy.
Redundancies could be made across various departments.
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.