Glen Electric has announced it will lay off "up to 40 people" at its Newry manufacturing plant.
The company, which makes convector heaters and panel heaters, has blamed the redundancies on the downturn and increased competition from China.
"We can no longer be economically competitive in the retail convector business by manufacturing in Newry and we are proposing that this product category will be transferred to our facility in China," Glen Electric said in a statement.
The company said it regretted the job cuts and will start a consultation process with the workers affected by the redundancies.
Glen Electric said it remained committed to maintaining its manufacturing capability in Newry.
"New jobs will be created in the renewables area over the coming months and years as the markets for these low carbon products develop", it added.
A spokeswoman from Invest NI, which has supported the company, said it had been made aware of the announcement.
Glen Electric NI is an arm of the international electric heating business company Glen Dimplex Group.
It employs around 500 people at sites in Newry, Portadown and Craigavon.
© UTV News