The Swedish Tetra Pak concern says it will close down parts of its plant at Romont, canton Fribourg, at the end of next year, with the loss of 131 jobs.
The packaging company blamed a very competitive environment that was constantly and rapidly changing for what it described as the "drastic" measure, in a statement on Wednesday.
Tetra Pak, which employs 241 at the site, said that 38 of those being made redundant would receive early retirement.
It reported that a redundancy package would be offered to those affected by the company's decision. This included help to find alternative employment.
The package had yet to be worked out in detail but payments would also take into account the number of years of service with the company.
Reacting to the news, canton Fribourg's government said it regretted the move, but was relieved that the complete closure of the site had been avoided.
R&D to continue
Production of Tetra Brik, which is the most frequently used package for long life products, and Tetra Top for refrigerated goods, is to stop at the end of next year.
But research and development is to be maintained.
The company said it wanted to develop its new Tetra Recart carton packaging system for a variety of food products at the Romont site.
It added that SFr20 million ($15.5 million) had already been invested in the project and a further SFr10 million would be spent over the next two years.
The firm's Swiss website ironically says that producing in Switzerland provides a "decisive advantage" for its clients.
It adds that, as a result, Tetra Pak could better satisfy client needs and adapt to the demands of the Swiss market rapidly and efficiently.
swissinfo with agencies
The Romont plant in canton Fribourg opened in 1976.
It produces 2.7 billion packages, 80% going for export and the remaining 20% for the Swiss market.
The factory at present specialises in the Tetra Brik and Tetra Top packages.
Tetra Pak employs about 21,000 worldwide and has its international headquarters at Pully just outside Lausanne in western Switzerland.
The company had a turnover of €7.5 billion (SFr11.6 billion) in 2004.