The National Distribution Union says redundancies at two Foodstuffs supermarkets in Christchurch mark the beginning of what it calls an avalanche of job losses following the earthquake.
FoodStuffs is closing its New World supermarkets in the suburbs of St Martins and Redcliffs because they are too damaged.
The decision affects 167 full-time and part-time staff at the St Martins store and 69 full-time and part-time staff at Redcliffs.
Foodstuffs South Island chief executive Steve Anderson says workers will receive redundancy equivalent to two months' pay, as well as shopping vouchers worth up to $500.
Redcliffs worker Sharon Mills says the announcement was not a surprise, because she and her New World colleagues had seen the state of the building, but it was still a shock and many were in tears.
She says she expects many thousands of people will lose their jobs, making it difficult for her to find a new one.
Tax removal would be welcome
The union's general secretary of retail, Maxine Gay, says there are many more job losses to come as businesses fail in the aftermath of the 6.3 quake on 22 February.
Ms Gay says she would like to see the Government remove the tax on redundancy payouts so that workers can make them stretch further before they are forced onto a benefit.
Foodstuffs says that it hopes to rebuild both supermarkets and that there may be jobs at its other stores for at least some of the redundant workers.
A New World store in Kaiapoi had to be closed after the 4 September earthquake, at a cost of 86 jobs.