Manufacturer Norske Skog has announced plans to close one of its newsprint machines at its Kawerau plant in New Zealand.
According to the company there is a surplus capacity of newsprint in the region, and the decision was unavoidable.
It will result in a permanent closure of 150,000 tonnes of capacity at the mill; time-frames and redundancy details are yet to be outlined.
At the same time the company will invest $107 million in upgrading machines in Australia, after getting substantial funding support from the Australian government, reports Newstalk ZB.
The Australian Federal Government has contributed $36 million in grants and the Tasmanian State Government has provided a $17 million loan.
New Zealand Labour leader David Shearer said any job losses in New Zealand will be bad news for the nation, although it will be a boon for Tasmania.
"What we are seeing is a government that has a laissez-faire, hands-off approach to business, and therefore as a result we've lost 25,000 jobs for example in manufacturing. This government needs to be much more engaged in job creation," Shearer said.