Lakeland Dairies, one of the country'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.
It is understood the main impact is on Lakeland's plant in Killeshandra, Co Cavan, where UHT, 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 layoffs.
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 next week.
Earlier this week, Lakeland Dairies announced a cut to the price it pays farmers for milk, citing the impact of Covid-19 on dairy markets.
In the Republic of Ireland, a price of 30c/L (including VAT and lactose bonus) will be paid for milk supplied in March.
This represents a reduction of 1.81c/L on the February base price.
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 global Covid-19 pandemic is having a dramatic impact on the dairy markets.