At least 400 Border Timbers Limited (BTL) workers are set to lose their jobs as the company closes non-performing units to stay afloat.
BTL chairman, Kenneth Schofield confirmed the development saying the impending closure of Paulington factory and part of Nyakamete plant was a cost containment measure.
"What needs to be addressed are the underlying problems. The group has set about addressing these problems by dealing aggressively with units that are not profitable, re-looking at every aspect of how we operate and whether we are best placed to operate the different working parts of the business," he explained.
Schofield added that the company would have to address the spiralling cost of labour.
"While every individual has a right to a fair wage, that wage must be affordable either by way of productivity or by way of direct cost," said Schofield.
"We are achieving neither and it is irresponsible of those involved in the wage decisions to continue to award wages that are quite simply miles out of the country's, let alone this group's affordability."
Schofield added: "If structural issues such as lack of power, usurious financing, and wanton destruction of property cannot be addressed, then the cost of labour has to be reduced if the group is to survive."
He said the overheads of BTL cannot be maintained in the medium term and the board would focus on returning the group to an acceptable level of performance, both operationally and financially.
The affected workers confirmed that retrenchment was imminent, adding that they should be given packages commensurate with the period served in the company.
"These people [BTL] made money long back and we need a fair share of the profits," said one of the workers who requested anonymity for fear of reprisals.
The company's human resources manager, James Pisirayi, refused to comment on the issue, citing company protocol.
In its 2013 annual report, BTL said the company was facing high operational costs caused by high wage bills among others.