Fresh fruit manufacturer Orchard House Foods is closing its Gateshead factory, affecting hundreds of jobs.
Nearly 430 jobs will be lost at the North East facility, which sells fruit and juice to retailers.
The company blamed inflation and an overall staff shortage for its current decision.
The business, which serves UK giants like Marks & Spencer, Tesco, and Pret A Manger, intends to shift operations to Corby, Northamptonshire.
It has begun consultations on the 430 jobs at risk of being eliminated and plans to relocate by the end of November.
The company stated that a “significant number of jobs will be created in Corby, with help provided to colleagues in Gateshead who choose to relocate.
The company also stated that people affected by the layoffs will be supported in finding new jobs in the local region.
CEO Steve Corby said: “Despite making significant investments in our Gateshead facility over a considerable period in an effort to turn around its financial performance, it is unfortunately still making losses that make it unsustainable over the long term.”
He added that it was not a decision that had been “taken lightly.”
He said: “Like many other businesses across the UK, we have been suffering from a series of economic and business challenges.”
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“They include rising energy, raw material, transport, and labour costs.
“There has also been a shortage of available staff to work at our Gateshead site.”
The shutdown comes amid rising food, energy, labor, and transportation costs.
Food industries have also faced severe labor shortages, which have been worsened by the UK’s withdrawal from the European Union.
Orchard House said customers and suppliers will be unaffected by the strategy.
The decision to relocate comes 18 months after Elaghmore, a UK private equity group, acquired Orchard House for over £25 million.