The Tahunanui factory is reported to have been making regular large losses and now Sealord plans to change from annually producing 18,000 tonnes of mainly half-shell mussels to 13,000 tonnes of mussel meat at the plant.
The workforce from 380 to 57 and the final annoucement of job cuts is expected in June.
Sealord chief executive Graham Stuart told the Nelson Mail that the company's operation at Beatty St would be a "scaled-down version of what the plant does today but without openers".
There are 135 openers employed at the plant.
The number of other jobs at the plant would be scaled back, with other aspects of meat production becoming more automated.
The newspaper said that under the proposal, the company plans to make available to affected staff 60 permanent and 90 temporary positions at its Vickerman St fish processing plant.
Mussel Factory Restructures
NEW ZEALAND - More than 320 workers at Sealord's mussel factory in Nelson, South Island New Zealand face an uncertain future as the company restructures the plant.