A Far North district councillor says the closure of Sanford's oyster processing plant in Kaeo will be devastating for the town.
Sanford announced the closure of the plant on Monday.
The decision affects 15 permanent employees and another 51 positions at the peak of the season.
The closure is a reflection of not having enough oysters to process as a result of the virus OsHV-1 virus, which has been present during the last two summers.
Sanford is the town's only industry and major employer.
Councillor Tom Baker says the closure will hit the town hard.
"It's going to be disastrous for Kaeo because Sanford's the main source of income for a lot people.
"Not only permanent people, but the seasonal workers and things come from all over the place to work there during the season," Mr Baker says.
Sanford managing director Eric Barratt says the closure decision is upsetting for managers and staff but the company will try to help its employees find other work.
Mr Barratt says that will not be easy in the Far North, but Sanford may be able to offer some jobs at its other plants to staff willing to relocate.
It will continue to use the Kaeo plant as a base for its marine farming operations in Northland, and try to find ways to lessen the impact of the virus.
