Toy manufacturer Hasbro is to lay off 140 staff at its Waterford plant.
The US company which makes well-known brands such as Play-Doh, My Little Pony, Monopoly, Scrabble has been in Waterford since 1977.
It blamed the cut backs on rising costs and increased competition from China.
The company said it hoped to preserve the 300 remaining permanent jobs through a restructuring programme.
Hasbro Ireland managing director Pat Gilhooly said: "The decision to consider redundancies, as part of an overall restructuring package, is unavoidable following a decline in the plant's overall workload."
Mr Gilhooly said: "If we can work together with employees and other stakeholders to quickly achieve the efficiencies proposed in the restructuring programme, it will go a long way towards ensuring the future of the Waterford plant".
Cllr Cha O'Neill, Mayor of Waterford, said the redundancies were only the latest in a series to have hit workers in Waterford.
"We have had a steady drip-drip of job losses right through 2006 from companies large and small — all coming after very heavy cuts at Waterford Crystal in recent years."
Labour Party TD for Waterford, Brian O'Shea, said: "The immediate priority must be that these employees find alternative jobs at the earliest opportunity. Yet, this task is made all the more difficult by the spate of recent closures that have taken place in Waterford in recent times.
"The closure of Waterford Crystal in Dungarvan and job losses at its plant in the city, the closure of the Kilmeaden cheese factory, and imminent losses at NTL together mean that Waterford is haemorrhaging jobs at an alarming rate.
"It is demoralising and depressing for local people to see employers such as Hasbro that have been in the area for 30 years cutting back drastically," he added.