Lakeland Dairies, one of Ireland's biggest dairy producers, has temporarily laid off 140 staff in Co Cavan.
The layoffs are Covid-19 related and will not involve any permanent redundancies, the company said.
However, it's understood the producer's operations in Northern Ireland, which includes a site in Strabane for making powdered milk, are currently unaffected.
The redundancies are believed to be at Lakeland's plant in Killeshandra, Co Cavan, where UHT milk, butter and ice cream are produced, all products hit by the global shutdown of hotels, restaurants and other food service outlets.
While grocery sales are running at a high, food producers are still being hit hard by the collapse in food service revenues. It is understood the plan has been agreed with employees and will include staff using up annual leave and short-time working, as well as the temporary lay-offs.
Meanwhile, employees who have been laid off for four weeks but have been kept on the payroll and some people involved in ice cream production may be called back as soon as this week.
Last week, Lakeland Dairies announced a cut to the price it pays farmers for milk, citing the impact of Covid-19 on dairy markets.
In Northern Ireland, a base price of 23.75p/L will be paid for March milk. This is a reduction of 1.5p/L on the February price.
Lakeland Dairies said the fallout from the Covid-19 pandemic is having a dramatic impact on the dairy markets.