The chief executive of Dairygold, Jerry Henchy, has said the group must cut up to 1,500 jobs to prevent huge losses over the next four years.
In an article in the group Employee News, Mr Henchy said losses would rise to €26m by 2007 unless the staff cuts were implemented.
Last year, profits at the Cork-based group fell to €4.8m from €25.2m in 2001.The company are planning to close at least two of its four processing sites and also to centralise operations to streamline costs.
A joint renegotiating forum, including the management and the company's union have already been in talks to agree a redundancy package agreement for any job losses.
Speaking at the Teagasc National Dairy Conference earlier this month Henchy said that the dairy industry needs a "sharper" survival strategy to ensure its future competitiveness.