The Sanofi Aventis pharmaceuticals factory in Fawdon, Newcastle, is set to close in 2015 with the loss of up to 450 jobs.
Staff left the plant and went home for the day, some of them in tears, after the announcement was made.
One told Sky Tyne and Wear: "I am absolutely devastated, I don't know what we're going to do."
Bob Bolam from Unite said: "It came as a shock to the staff. We are looking to work with the company to mitigate any losses and to help the surrounding area which is obviously going to be devastated by the loss of the jobs."
In a statement, Sanofi Aventis said: "Under the proposal the plant, which makes solid dose oral medications mainly for UK and European markets, would be scheduled to close by mid-2015.
"The proposal is being considered in the context of an adverse economic climate and the challenging pharmaceutical market in Europe.
"The products manufactured at the Fawdon site have been adversely impacted by other factors, including generic competition, resulting in a fall in demand and production volumes."
It’s understood the firm is now entering a 90-day consultation period with staff and the union.
The plant produces billions of tablets and capsules such as heart medication Plavix, Xatral and Epilem.
The company opened its new packaging plant on Edgefield Avenue in 2009, bringing its investment in the Fawdon site to £100m over eight years.
The site previously belonged to Sterling Organics and produced bathroom cabinet favourites such as Andrews Liver Salts, Milk of Magnesia, Solpadeine, Panadol and Co-codamol.
The blow comes as the latest figures show a slight improvement in North East unemployment.
The jobless total for the region fell by 11,000 in the three months to January 2012, with the figure now standing at 138,000.
But the North East still has the highest unemployment rate in England and Wales at 10.8 percent compared to a national average of 8.4 percent.
Chi Onwurah MP for Newcastle Central and Shadow Minister for Innovation and Science said: "Like most people in Newcastle I am shocked and deeply saddened by the announcement.
"Growing up in Kenton I knew just how important to people in Newcastle the Winthrops works were."
The firm employs about 1,800 people in the UK, including 300 at its UK headquarters in Guildford.
Leader of Newcastle City Council, Coun Nick Forbes, said: "It will be a devastating blow for hundreds of families if these plans go head as announced.
"The city council has contacted the company, and we will support staff who face losing their jobs to help them find alternative employment."
Liberal Democrat councillor for Fawdon Brenda Hindmarsh said news of the closure came as a shock.
She said: "There has been a factory there for more than 30 years, all the time I have lived here, and its closure will be terrible news.
"It is only a year or two since Sanofi invested a lot of money updating the site. We will meet with Sanofi soon to discuss with them what, if anything, can be done."
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