About 50 workers will be shed from the Cadbury factory in Hobart as the chocolate maker increases its investment in automated technology.
Parent company Mondelez International told staff on Tuesday that more than a tenth of the Claremont plant's 450-strong workforce would be gone by the end of the year.
Cadbury expects the majority of the cuts to be voluntary redundancies, but hasn't ruled out some being non-voluntary.
Managing director of chocolate Jason Bonisoli said redundancies would be offered throughout the company from senior management to the factory floor.
"This is us saying we want to secure manufacturing in Tasmania," he said.
"We're in a global market that is under increased competition and pressure."
Cadbury, which has been operating in Tasmania for 95 years, got rid of some 80 workers two years ago.
The most recent cuts come as part of a $75 million 18-month investment in upgraded equipment and automation, plus the upskilling of staff.
But the Australian Manufacturing Workers' Union has raised concerns staff will be left overworked.
"Workers are already telling me they are overworked. A reduction in permanent jobs would only add to the stress," state secretary John Short said.
Mondelez International area vice president Amanda Banfield said the Claremont factory had to streamline its manufacturing in the face of increasing costs and raw material prices.
"To remain competitive, we need to improve our conversion costs by 30 per cent," she said.
"It's really important that our sites are self-sustaining. We're not seeking any government assistance."
The state government said the news was disappointing and it would do everything it could to assist workers.
"While I note that Cadbury has also announced a significant investment at its Claremont facility, that will be cold comfort for staff," Matthew Groom, Minister for State Growth said on Tuesday night.
The Claremont plant was set up in 1922, the first Cadbury operation outside the UK.
Cadbury says it has invested $110 million in the factory in the past five years.