Spotless has confirmed it will not renew the contracts of 127 workers when it takes control of an industrial laundry in Melbourne.
Married couples and those on the job for two decades were among the workers told on Tuesday morning they wouldn't be needed at the Cabrini Linen Service factory beyond June 30.
Spotless, an ASX-listed integrated facilities services company, says it will keep the CLS building open but already has an existing laundry workforce of about 1600.
"Following the completion of the acquisition (on July 1), the existing workforce will not be retained," the company said in a statement on Wednesday.
The employees work for Cabrini Health, which sold the business for an undisclosed sum.
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Cabrini said it will do all it could to employ the workers in other areas. Employee counselling will also be available to all staff.
It said the sale of the linen business was made following "careful consideration and planning".
"Our staff at CLS have done a great job in competing successfully, but our view is that we will increasingly struggle to compete with the bigger players," chief executive Michael Walsh said in a statement.
"Proceeds from the sale will be re-invested across Cabrini's mission, in particular in health facilities, and new services targeting those in frail health."
But the Health Workers Union said promises of work elsewhere "unfortunately" won't work.
"It's not as simple, when you work in linen care, to find a job immediately," HWU secretary Diana Asmar told AAP.
"These are unskilled workers ... they need to skill up to go into other businesses in Cabrini."
