A rejigging of Cavalier Bremworth's operations will see up to 68 jobs lost from Whanganui and 36 from Christchurch.
Citing decreasing demand for woollen carpet, the company said it would move its woollen yarn spinning operations from Whanganui to its Napier plant to "realise greater efficiencies".
Under the proposal, staff at the Whanganui factory will be cut from 108 to 40. As well, the company's felting plant in Christchurch will close with 36 job losses.
Cavalier Bremworth said consolidating the spinning plants in Napier would create 39 more positions, and staff in Whanganui and Christchurch would be able to apply for those jobs as well as the positions remaining in Whanganui.
Chief executive Paul Alston said the company was talking to staff about the proposed changes and was aiming to have everything finalised by May 2 and the process completed by October.