The Liebherr Container Crane manufacturer in Killarney, the southwest region's biggest heavy engineering company, has given its staff formal notice of a three-day week.
The Killarney workforce of up to 900 are drawn from around the region and were given notice last week before the annual two-week holiday shut down.
The news had been anticipated since early July, and the staff have been told the measure will be "temporary", and was being taken to keep job losses at a minimum.
The plant is expected to return to capacity in the New Year.
The reduced week from September looks set to affect most employees, and is likely to last to the end of the year.
SIPTU, which represents 450 workers, have said the workforce had been warned of up to 200 job losses, before the three-day week had been decided.
However, some 27 people on long-term contracts have lost their jobs in recent weeks, the union said.
SIPTU assistant industrial organiser Joe Kelly said negotiations were "ongoing", in particular over a sick pay scheme which was also being suspended.
A review of the operation in Killarney was undertaken in recent months.
Absenteeism levels on the factory floor were found to be well in excess of the national average - and the "sick scheme" for waged employees is being suspended temporarily, management has told the union.
Inefficiencies in turnover were also identified.
Global factors including a downturn in business and in investment by container terminal operators in ports worldwide, and increased competition from China and the far east are also being blamed for the current difficulties in the Killarney factory which had been undergoing a boom period.
Regionally, haulage firms and plants doing subcontract work for Liebherr are likely to be affected by the downturn in production.
The Killarney company is part of the successful Liebherr Group, one of the world's largest manufacturers of construction machinery with a total workforce of almost 45,000.
Management has made arrangements with factories in Germany, Austria, Switzerland and the UK to provide temporary assignments for employees from the manufacturing end and employees also are also being advised of social welfare entitlements.
Founded by Dr Hans Liebherr, after whom one of the town's main link roads is named, Liebherr in Killarney began in 1958 manufacturing tower cranes.
The Liebherr family company owns three five-star hotels in the area and in the past decade alone some €100 million has been put into major upgrading of the Hotel Europe and the Hotel Dunloe Castle near Killarney.
It has also invested heavily in equipment, technology automation, training and facilities at the crane factory.
Cranes from the Killarney plant go all over the world via the port of Fenit, near Tralee.
